Earnings · $UPS
UPS Beats Third-Quarter Estimates and Raises Full-Year Outlook Ahead of Holidays
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Higher revenue per package offset lower Amazon volume, while a goodwill charge weighed on GAAP profit in supply chain.
By Emmanuel Cruz ·
United Parcel Service reported third-quarter results on Tuesday that came in ahead of Wall Street forecasts and raised its full-year targets, signaling that its strategy of shipping fewer but more profitable packages is holding up heading into the peak holiday season.
The parcel carrier posted revenue of $22.9 billion and adjusted earnings of $1.69 per share [1]. Analysts had expected adjusted earnings of $1.63 a share, according to a Bloomberg average cited by Transport Topics [2], while StockStory put the consensus revenue estimate at $22.18 billion, implying a beat of about 3.3% [3]. Revenue grew 6.9% from a year earlier and the operating margin was 7.6%, unchanged from the same quarter of 2025 [3].
On a GAAP basis, diluted earnings were $1.37 per share. The gap reflects $279 million of net charges, including $130 million of after-tax transformation costs and a $182 million goodwill impairment in the Supply Chain Solutions unit, partly offset by a $33 million gain from selling MD-11 aircraft assets [1].
Pricing did much of the work. In the U.S. Domestic segment, revenue rose 4.5% to $14.87 billion, helped by a 6.1% increase in revenue per piece, and adjusted operating profit climbed to $1.03 billion from $905 million a year earlier [1]. International revenue rose 7.1% to $5.01 billion as revenue per piece jumped 15%, with an operating margin of 14.9% [1]. Supply Chain Solutions grew revenue 18.2% to $2.98 billion, led by forwarding, logistics and healthcare, but its adjusted operating profit fell to $274 million from $536 million [1].
The results come about 18 months into a plan to cut roughly half of the volume UPS handles for Amazon, a customer that made up 12% of the company's revenue in 2024 [2]. Schwab noted that higher-margin shipments and fewer Amazon deliveries supported the quarter [4].
UPS lifted its 2026 revenue forecast to about $92.6 billion from $91.2 billion, above the $91.8 billion analyst average compiled by Bloomberg [2]. It now expects adjusted operating profit of $8.75 billion, adjusted earnings of $7.28 per share and adjusted free cash flow of about $6.1 billion for the year [1]. For the fourth quarter, the company guided to revenue of about $25.7 billion and adjusted operating profit of about $3.3 billion [1]. StockStory said the fourth-quarter revenue outlook compared with a consensus of $25.41 billion [3].
Chief Executive Carol Tomé said the company is "entering the holiday shipping season from a position of strength" [2]. UPS plans to hire about 100,000 seasonal workers and expects to apply demand surcharges in the coming months [2].
Investors responded positively. Shares rose about 2.1% to $102.25 shortly after the release [3], and were up almost 2% around the opening bell, according to Schwab [4].
For markets, the report offers a read on the health of goods demand and shipping volumes as the holiday period approaches, at a time when the Federal Reserve is meeting to weigh elevated inflation. Items to watch include whether the company's surcharges stick through the peak season, how quickly the Supply Chain Solutions margin recovers after the impairment, and whether fourth-quarter volumes support the higher guidance.
Sources:
[1] STAT Times, "UPS reports strong Q3 2026 results", October 27, 2026. https://www.stattimes.com/logistics/ups-reports-strong-q3-2026-results-1361067
[2] Transport Topics, "UPS raises outlook in sign of strength for holiday season", October 27, 2026. https://www.ttnews.com/articles/ups-earnings-q3-2026
[3] StockStory via Yahoo Finance, "United Parcel Service's (NYSE:UPS) Q3 2026: beats on revenue, full-year outlook slightly exceeds expectations", October 27, 2026. https://finance.yahoo.com/markets/stocks/articles/united-parcel-nyse-ups-q3-102407630.html
[4] Charles Schwab, "Stocks Extend Gains on Firm Earnings, Solid Tech", October 27, 2026. https://www.schwab.com/learn/story/stock-market-update-open
This article was produced with AI assistance. It is for informational purposes only and is not financial advice. StockVolt and its authors may hold positions in securities mentioned.