UPS Raises Full-Year Outlook After Third-Quarter Beat

UPS lifted its full-year 2026 guidance on Tuesday after third-quarter revenue rose 6.7% to $22.9 billion, with growth in all three of its reporting segments. Adjusted diluted earnings came in at $1.69 a share, ahead of the $1.63 analysts expected, while revenue beat the $22.29 billion forecast, according to CNBC.

The picture under generally accepted accounting principles (GAAP, the standard accounting rulebook) was less flattering. Diluted earnings were $1.37 a share, against $1.55 a year earlier, and net income fell to $1.16 billion from $1.31 billion. The quarter carried a net charge of $279 million, or $0.32 a share, combining transformation strategy costs and an impairment, partly offset by a gain on the sale of MD-11 aircraft assets.

What did the company now expect for 2026?

UPS now guides to consolidated revenue of about $92.6 billion for the full year, up from its prior forecast of $91.2 billion, according to The Wall Street Journal. The other raised targets:

• Adjusted operating profit of about $8.75 billion
• Adjusted diluted earnings of about $7.28 a share, versus a prior $7.22 and the $7.19 that FactSet-polled analysts anticipated
• Adjusted free cash flow (cash generated after capital spending) of about $6.1 billion

For the fourth quarter, management expects revenue of about $25.7 billion and adjusted operating profit of about $3.3 billion.

CEO Carol Tomé was direct. "Our third-quarter results demonstrate the continued strengthening of our business fundamentals, driven by premium growth and greater network efficiency," she said in a statement. "Given the strength we see in the business, we are raising our full-year financial guidance."

Where did the growth come from?

U.S. Domestic revenue rose 4.5%, helped by a 6.1% increase in revenue per piece, even as average daily package volume slipped to about 15.6 million pieces from 16.2 million a year earlier. Fewer parcels at higher prices is a deliberate trade, and the arithmetic worked.

International revenue climbed 7.1%, with revenue per piece up 15.0%. Supply Chain Solutions revenue jumped 18.2%, led chiefly by expansion in forwarding and logistics, including healthcare work.

That segment's profit tells a messier story. Operating profit was $92 million, down from $525 million a year earlier. The latest quarter absorbed a $182 million goodwill impairment charge (a write-down of an acquisition's carrying value), while the year-earlier quarter enjoyed a $330 million pre-tax gain from a sale-leaseback transaction.

What happens next?

The volume reductions tied to UPS's largest customer, widely understood to be Amazon, were completed in the second quarter. The Efficiency Reimagined cost program will not conclude until the fourth quarter of 2027. The company booked about $1.8 billion in program benefits over the first nine months of 2026 and expects nearly $3 billion for the full year.

Tomé and CFO Brian Dykes were scheduled to discuss the results with investors at 8:30 a.m. ET on Tuesday. The market rendered an early verdict: UPS shares rose 1.7% in premarket trading. A guidance raise, a revenue beat and a shrinking bottom line — the market chose to price the first two. Judging by the third, the efficiency program has further to run.