UPS Q4 2025 Earnings Lift Outlook

UPS reported Q4 2025 earnings on Jan. 27, 2026, signaling a strategic shift after results beat estimates and the company raised its 2026 revenue outlook. Management cited network changes and cost savings as key drivers supporting margin expansion.

Quarter Results and 2026 Guidance

Consolidated Q4 2025 revenue was $24.5 billion, down 3.2% year over year but above analyst estimates near $24.0 billion. GAAP operating profit reached $2.6 billion, reflecting a 10.5% margin, while non-GAAP adjusted operating profit was $2.9 billion, or an 11.8% margin. Diluted earnings per share were $2.10 GAAP and $2.38 non-GAAP adjusted, exceeding expectations of about $2.21.

GAAP results included $238 million in charges, equal to $0.28 per share, consisting of a $137 million non-cash, after-tax write-off related to the MD-11 fleet and $101 million in transformation costs.

For full-year 2025, UPS reported consolidated revenue of $88.7 billion, GAAP operating profit of $7.9 billion (8.9% margin), and non-GAAP adjusted operating profit of $8.7 billion (9.8% margin).

The company’s 2026 guidance projects about $89.7 billion in consolidated revenue and a non-GAAP adjusted operating margin near 9.6%. It also forecast capital expenditures of roughly $3.0 billion, dividend payments of about $5.4 billion pending board approval, and an effective tax rate near 23%. The outlook assumes the post-Amazon volume glide-down completes midyear and excludes certain strategic initiative costs, with the broader transformation continuing through 2027.

Network Changes, Segment Performance, and Cash Returns

In Q4, U.S. Domestic revenue was $16.8 billion, down 3.2% year over year, with operating profit of $1.4 billion and an 8.5% margin (10.2% adjusted). International revenue rose 2.5% to $5.0 billion, generating $884 million in operating profit and a 17.5% margin (18.0% adjusted). Supply Chain Solutions revenue declined 12.7% to $2.7 billion, with operating profit of $263 million and a 9.8% margin (10.3% adjusted).

UPS completed an accelerated retirement of its MD-11 fleet following an FAA grounding after a November 2025 crash near its Louisville hub. The company said its Network Reconfiguration and Efficiency Reimagined programs produced $3.5 billion in savings in 2025, which underpin the margin outlook.

Full-year 2025 cash from operations totaled $8.5 billion, with non-GAAP adjusted free cash flow of $5.5 billion. UPS returned $6.4 billion to shareholders and declared a Q1 2026 dividend of $1.64 per share.

Management linked the network changes and cost savings to stronger execution in 2026 after the Amazon volume glide-down. Chief Executive Officer Carol Tomé said, “2026 will be an inflection point in the execution of our strategy to deliver growth and sustained margin expansion.”