- UPS raised its 2026 revenue forecast to about $92.6 billion from $91.2 billion, its second straight guidance increase, and also lifted its adjusted earnings guidance. The $1.4 billion bump, about 1.5% (Lumida calculation), put the outlook above Wall Street’s estimates and signals confidence heading into peak season.
- Third-quarter adjusted earnings were $1.69 a share against the $1.63 expected, and revenue rose 6.7% to $22.9 billion versus the $22.29 billion LSEG consensus. The supply chain business, which includes healthcare, grew revenue 18.2%, and CEO Carol Tomé said healthcare revenue topped $3 billion for a third straight quarter.
- The stock reversed premarket gains after Tomé warned that fourth-quarter average daily volume will be down year over year, reflecting the deliberate cut in low-margin Amazon parcels. UPS spent about 18 months removing half of the volume from Amazon, which made up 12% of sales in 2024, as it shifts toward higher-yielding healthcare, cross-border and business-to-business shipments.
- JPMorgan’s Brian Ossenbeck cautioned that a large fuel tailwind implies weaker underlying core pricing, with high fuel costs tied in part to the US war in Iran. UPS is hiring about 100,000 seasonal workers and expects nearly 70% of packages to flow through automated processes this holiday season.
What Happened?
United Parcel Service reported third-quarter results on Tuesday that beat expectations on both lines and raised its full-year outlook, now projecting consolidated revenue of about $92.6 billion and fourth-quarter revenue of $25.7 billion. Net income was $1.16 billion, or $1.37 a share, down from $1.31 billion, or $1.55, a year earlier, and the quarter included a $130 million after-tax charge tied to transformation costs. Domestic revenue rose 4.5% and international revenue 7.1%. “US consumers remain resilient and the outlook for holiday demand is strong,” Tomé said on the earnings call.
Why It Matters?
The guidance raise suggests UPS’s network overhaul, built on fewer but higher-yielding packages, workforce reductions and facility closures, is starting to show up in margins. Tomé said the company is “past the inflection point” on several parts of its US strategy. The muted stock reaction shows investors are still weighing whether price and mix gains can offset lower volume, and how much of the revenue strength comes from fuel surcharges rather than core pricing power.
What’s Next?
The holiday peak is the next test of the automation push and of UPS’s ability to apply fuel and demand surcharges without losing customers. Investors will watch whether volume stabilizes once the Amazon comparison is lapped, and whether healthcare growth keeps lifting the mix. Longer term, negotiations with the Teamsters on a new drivers’ contract ahead of the current pact’s 2028 expiry remain a key cost risk.
