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United Parcel Service Q3 Earnings Beat on Pricing, 2026 Outlook Raised
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Key Takeaways
UPS Q3 earnings beat estimates by 3.7%, while revenues rose 6.7% to $22.85 billion on stronger pricing.
Domestic operating profit rose 14.3%, but Supply Chain Solutions profit plunged 48.9% despite sales growth.
UPS lifts its 2026 revenue outlook to $92.6 billion and adjusted EPS forecast to $7.28 on Q3 strength.
United Parcel Service, Inc. (UPS - Free Report) ) reported third-quarter 2026 results wherein both earnings and revenues surpassed the Zacks Consensus Estimate, supported by improved pricing and revenue growth across all three segments.
Quarterly adjusted earnings of $1.69 per share declined 2.9% year over year but beat the Zacks Consensus Estimate of $1.63 by 3.7%. Revenues increased 6.7% to $22.85 billion and surpassed the consensus estimate of $22.25 billion by 2.7%. International revenue per piece climbed 15%, while domestic pricing gains supported performance.
United Parcel Service, Inc. Price, Consensus and EPS Surprise
Encouraged by its performance, UPS raised its fourth-quarter and full-year 2026 financial guidance. For the fourth quarter, management expects consolidated revenues of approximately $25.7 billion and adjusted operating profit of around $3.3 billion. The Zacks Consensus Estimate for fourth quarter revenues is currently pegged at $25.52 billion.
For 2026, UPS now expects consolidated revenues of approximately $92.6 billion, up from its previous projection of $91.2 billion and the current Zacks Consensus Estimate of $91.71 billion. Adjusted operating profit guidance increased to $8.75 billion from $8.65 billion, while adjusted earnings per share guidance rose to $7.28 from $7.22. The company also raised its adjusted free cash flow target to approximately $6.1 billion.
UPS Domestic Revenue Rises on Strong Pricing
U.S. Domestic Package revenues increased 4.5% year over year to $14.87 billion, driven by a 6.1% improvement in revenue per piece. Average daily package volume declined to 15.6 million from 16.2 million a year earlier, indicating that higher pricing offset reduced shipment activity.
Adjusted operating profit advanced 14.3% year over year to $1.03 billion. The adjusted operating margin expanded 60 basis points to 7%, even as adjusted cost per piece increased 5.5% to $13.32. The improvement in profitability reflected stronger operating performance despite higher unit costs.
United Parcel Service's International Sales Grow
International Package revenues increased 7.1% year over year to $5.01 billion. The segment benefited from strong revenue-per-piece growth, which helped offset pressure on shipment activity.
Adjusted operating profit increased 8% year over year to $746 million from $691 million. The adjusted operating margin expanded marginally to 14.9% from 14.8%, indicating that the segment maintained profitability while delivering higher revenues.
UPS Supply Chain Business Faces Profit Pressure
Supply Chain Solutions revenues surged 18.2% year over year to $2.98 billion, marking the strongest revenue growth among UPS' operating segments. The improvement was primarily driven by growth in forwarding and logistics operations, including healthcare.
However, adjusted operating profit declined 48.9% year over year to $274 million from $536 million. The adjusted operating margin contracted sharply to 9.2% from 21.3%, reflecting considerable profitability pressure despite robust top-line growth. The segment also recorded a $182 million goodwill impairment charge, affecting reported operating results.
United Parcel Service's Adjusted Margin Contracts
Consolidated adjusted operating profit declined 3.7% year over year to $2.05 billion from $2.13 billion. The adjusted operating margin contracted to 9% from 10%, as weakness in Supply Chain Solutions outweighed improved profitability in the domestic and international businesses.
On a GAAP basis, operating profit fell to $1.74 billion from $1.80 billion, while earnings declined to $1.37 per share from $1.55. Results included a net charge of $279 million, or 32 cents per share, comprising transformation strategy expenses and goodwill impairment, partially offset by gains from asset sales.
UPS Network Initiatives Deliver Cost Benefits
UPS generated approximately $1.8 billion in benefits from its Network Reconfiguration and Efficiency Reimagined initiatives during the first nine months of 2026. Management expects these programs to deliver nearly $3 billion in benefits for the full year.
The company reduced its operational workforce and closed daily operations at certain facilities as part of its network transformation. While the planned volume reductions from its largest customer were completed in the second quarter, the Efficiency Reimagined initiative is expected to continue through the fourth quarter of 2027.
United Parcel Service's Free Cash Flow Climbs
Cash provided by operating activities increased to $5.99 billion during the first nine months of 2026 from $5.15 billion a year earlier. Capital expenditures declined to $2.22 billion from $2.97 billion.
Free cash flow surged 53.8% year over year to $4.22 billion from $2.74 billion. The improvement strengthens UPS' ability to fund network investments, meet financial obligations and return capital to shareholders.
Othe Aspects of UPS’ Guidance
Capital expenditures are still projected to be approximately $3 billion. Dividend payments are expected to total around $5.4 billion, subject to board approval. The effective tax rate is forecasted to be approximately 23%, with pension contributions of $1.3 billion expected for the year.
Delta Air Lines (DAL - Free Report) reported third-quarter 2026 earnings (excluding 57 cents from non-recurring items) of $1.72 per share, missing the Zacks Consensus Estimate of $1.80 by 4.44%. Earnings increased year over year despite sharply higher fuel costs and rising non-fuel expenses.
Adjusted revenues climbed 16% year over year to $17.59 billion but missed the consensus estimate of $17.74 billion by 0.9%. Broad demand strength and healthy yields lifted adjusted total revenue per available seat mile or TRASM, 15%, while premium and diversified revenue streams continued to expand.
J.B. Hunt Transport Services, Inc. (JBHT - Free Report) reported third-quarter 2026 earnings of $1.82 per share, up 3.4% from $1.76 a year ago. The figure beat the Zacks Consensus Estimate of $1.81 by 0.6%.
Operating revenues climbed 20.4% year over year to $3.68 billion and surpassed the consensus mark of $3.56 billion by 3.2%. Stronger pricing, an 8% increase in Intermodal loads and higher brokerage volumes supported growth. However, elevated driver-related expenses, fuel costs and insurance claims pressured profitability.
United Airlines Holdings, Inc. (UAL - Free Report) reported third-quarter 2026 adjusted earnings of $2.54 per share, down 8.6% year over year and below the Zacks Consensus Estimate of $2.60 by 2.3%. Higher fuel expenses weighed on profitability despite strong revenue growth.
Operating revenues rose 17.4% to $17.88 billion but missed the consensus mark of $17.91 billion by 0.2%. A 15.9% increase in total revenue per available seat mile or TRASM, supported the top line, driven by strength across premium, loyalty and contracted business revenues.
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United Parcel Service Q3 Earnings Beat on Pricing, 2026 Outlook Raised
Key Takeaways
United Parcel Service, Inc. (UPS - Free Report) ) reported third-quarter 2026 results wherein both earnings and revenues surpassed the Zacks Consensus Estimate, supported by improved pricing and revenue growth across all three segments.
Quarterly adjusted earnings of $1.69 per share declined 2.9% year over year but beat the Zacks Consensus Estimate of $1.63 by 3.7%. Revenues increased 6.7% to $22.85 billion and surpassed the consensus estimate of $22.25 billion by 2.7%. International revenue per piece climbed 15%, while domestic pricing gains supported performance.
United Parcel Service, Inc. Price, Consensus and EPS Surprise
United Parcel Service, Inc. price-consensus-eps-surprise-chart | United Parcel Service, Inc. Quote
Encouraged by its performance, UPS raised its fourth-quarter and full-year 2026 financial guidance. For the fourth quarter, management expects consolidated revenues of approximately $25.7 billion and adjusted operating profit of around $3.3 billion. The Zacks Consensus Estimate for fourth quarter revenues is currently pegged at $25.52 billion.
For 2026, UPS now expects consolidated revenues of approximately $92.6 billion, up from its previous projection of $91.2 billion and the current Zacks Consensus Estimate of $91.71 billion. Adjusted operating profit guidance increased to $8.75 billion from $8.65 billion, while adjusted earnings per share guidance rose to $7.28 from $7.22. The company also raised its adjusted free cash flow target to approximately $6.1 billion.
UPS Domestic Revenue Rises on Strong Pricing
U.S. Domestic Package revenues increased 4.5% year over year to $14.87 billion, driven by a 6.1% improvement in revenue per piece. Average daily package volume declined to 15.6 million from 16.2 million a year earlier, indicating that higher pricing offset reduced shipment activity.
Adjusted operating profit advanced 14.3% year over year to $1.03 billion. The adjusted operating margin expanded 60 basis points to 7%, even as adjusted cost per piece increased 5.5% to $13.32. The improvement in profitability reflected stronger operating performance despite higher unit costs.
United Parcel Service's International Sales Grow
International Package revenues increased 7.1% year over year to $5.01 billion. The segment benefited from strong revenue-per-piece growth, which helped offset pressure on shipment activity.
Adjusted operating profit increased 8% year over year to $746 million from $691 million. The adjusted operating margin expanded marginally to 14.9% from 14.8%, indicating that the segment maintained profitability while delivering higher revenues.
UPS Supply Chain Business Faces Profit Pressure
Supply Chain Solutions revenues surged 18.2% year over year to $2.98 billion, marking the strongest revenue growth among UPS' operating segments. The improvement was primarily driven by growth in forwarding and logistics operations, including healthcare.
However, adjusted operating profit declined 48.9% year over year to $274 million from $536 million. The adjusted operating margin contracted sharply to 9.2% from 21.3%, reflecting considerable profitability pressure despite robust top-line growth. The segment also recorded a $182 million goodwill impairment charge, affecting reported operating results.
United Parcel Service's Adjusted Margin Contracts
Consolidated adjusted operating profit declined 3.7% year over year to $2.05 billion from $2.13 billion. The adjusted operating margin contracted to 9% from 10%, as weakness in Supply Chain Solutions outweighed improved profitability in the domestic and international businesses.
On a GAAP basis, operating profit fell to $1.74 billion from $1.80 billion, while earnings declined to $1.37 per share from $1.55. Results included a net charge of $279 million, or 32 cents per share, comprising transformation strategy expenses and goodwill impairment, partially offset by gains from asset sales.
UPS Network Initiatives Deliver Cost Benefits
UPS generated approximately $1.8 billion in benefits from its Network Reconfiguration and Efficiency Reimagined initiatives during the first nine months of 2026. Management expects these programs to deliver nearly $3 billion in benefits for the full year.
The company reduced its operational workforce and closed daily operations at certain facilities as part of its network transformation. While the planned volume reductions from its largest customer were completed in the second quarter, the Efficiency Reimagined initiative is expected to continue through the fourth quarter of 2027.
United Parcel Service's Free Cash Flow Climbs
Cash provided by operating activities increased to $5.99 billion during the first nine months of 2026 from $5.15 billion a year earlier. Capital expenditures declined to $2.22 billion from $2.97 billion.
Free cash flow surged 53.8% year over year to $4.22 billion from $2.74 billion. The improvement strengthens UPS' ability to fund network investments, meet financial obligations and return capital to shareholders.
Othe Aspects of UPS’ Guidance
Capital expenditures are still projected to be approximately $3 billion. Dividend payments are expected to total around $5.4 billion, subject to board approval. The effective tax rate is forecasted to be approximately 23%, with pension contributions of $1.3 billion expected for the year.
Currently, UPS has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Q3 Performance of Other Transportation Companies
Delta Air Lines (DAL - Free Report) reported third-quarter 2026 earnings (excluding 57 cents from non-recurring items) of $1.72 per share, missing the Zacks Consensus Estimate of $1.80 by 4.44%. Earnings increased year over year despite sharply higher fuel costs and rising non-fuel expenses.
Adjusted revenues climbed 16% year over year to $17.59 billion but missed the consensus estimate of $17.74 billion by 0.9%. Broad demand strength and healthy yields lifted adjusted total revenue per available seat mile or TRASM, 15%, while premium and diversified revenue streams continued to expand.
J.B. Hunt Transport Services, Inc. (JBHT - Free Report) reported third-quarter 2026 earnings of $1.82 per share, up 3.4% from $1.76 a year ago. The figure beat the Zacks Consensus Estimate of $1.81 by 0.6%.
Operating revenues climbed 20.4% year over year to $3.68 billion and surpassed the consensus mark of $3.56 billion by 3.2%. Stronger pricing, an 8% increase in Intermodal loads and higher brokerage volumes supported growth. However, elevated driver-related expenses, fuel costs and insurance claims pressured profitability.
United Airlines Holdings, Inc. (UAL - Free Report) reported third-quarter 2026 adjusted earnings of $2.54 per share, down 8.6% year over year and below the Zacks Consensus Estimate of $2.60 by 2.3%. Higher fuel expenses weighed on profitability despite strong revenue growth.
Operating revenues rose 17.4% to $17.88 billion but missed the consensus mark of $17.91 billion by 0.2%. A 15.9% increase in total revenue per available seat mile or TRASM, supported the top line, driven by strength across premium, loyalty and contracted business revenues.