3Q 2026
Filed Oct 27, 2026UPS releases 3Q 2026 earnings: consolidated revenue increased 6.7% to $22.9B; raises fourth-quarter 2026 financial guidance and full-year 2026 outlook.
Third-quarter revenue increased across all segments and UPS raised fourth-quarter and full-year guidance, but consolidated GAAP operating profit, non-GAAP adjusted operating profit, GAAP net income, non-GAAP adjusted net income, GAAP EPS and non-GAAP adjusted EPS were below the prior-year quarter. Supply Chain Solutions operating profit declined substantially, including a goodwill impairment charge.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| 3Q 2026 consolidated revenueGAAP | $22.9B | – | 6.7% |
| 3Q 2026 consolidated operating profitGAAP | $1.74B | – | – |
| 3Q 2026 consolidated operating marginGAAP | 7.6% | – | – |
| 3Q 2026 non-GAAP adjusted consolidated operating profitnon-GAAP | $2.05B | – | – |
| 3Q 2026 non-GAAP adjusted consolidated operating marginnon-GAAP | 9.0% | – | – |
| 3Q 2026 income before income taxesGAAP | $1.57B | – | – |
| 3Q 2026 income tax expenseGAAP | $408M | – | – |
| 3Q 2026 non-GAAP adjusted income before income taxesnon-GAAP | $1.88B | – | – |
| 3Q 2026 non-GAAP adjusted income tax expensenon-GAAP | $439M | – | – |
| 3Q 2026 net incomeGAAP | $1.16B | – | – |
| 3Q 2026 non-GAAP adjusted net incomenon-GAAP | $1.44B | – | – |
| 3Q 2026 diluted earnings per shareGAAP | $ 1.37 | – | – |
| 3Q 2026 non-GAAP adjusted diluted earnings per sharenon-GAAP | $ 1.69 | – | – |
| 3Q 2026 U.S. Domestic Package operating expensesGAAP | $13.96B | – | 2.5% |
| 3Q 2026 U.S. Domestic Package non-GAAP adjusted operating expensesnon-GAAP | $13.83B | – | 3.9% |
| 3Q 2026 International Package operating expensesGAAP | $4.26B | – | 6.6% |
| 3Q 2026 International Package non-GAAP adjusted operating expensesnon-GAAP | $4.26B | – | 7.0% |
| 3Q 2026 Supply Chain Solutions operating expensesGAAP | $2.89B | – | 44.7% |
| 3Q 2026 Supply Chain Solutions non-GAAP adjusted operating expensesnon-GAAP | $2.71B | – | 36.3% |
| 3Q 2026 average daily U.S. Domestic Package volumeother | 15.62M | – | – |
| 3Q 2026 U.S. Domestic Package cost per pieceGAAP | $ 13.45 | – | 4.1% |
| 3Q 2026 U.S. Domestic Package non-GAAP adjusted cost per piecenon-GAAP | $ 13.32 | – | 5.5% |
| Nine months ended September 30, 2026 operating profitGAAP | $3.94B | – | – |
| Nine months ended September 30, 2026 operating marginGAAP | 5.9% | – | – |
| Nine months ended September 30, 2026 non-GAAP adjusted operating profitnon-GAAP | $5.48B | – | – |
| Nine months ended September 30, 2026 non-GAAP adjusted operating marginnon-GAAP | 8.2% | – | – |
| Nine months ended September 30, 2026 net incomeGAAP | $2.63B | – | – |
| Nine months ended September 30, 2026 non-GAAP adjusted net incomenon-GAAP | $3.84B | – | – |
| Nine months ended September 30, 2026 diluted earnings per shareGAAP | $ 3.09 | – | – |
| Nine months ended September 30, 2026 non-GAAP adjusted diluted earnings per sharenon-GAAP | $ 4.52 | – | – |
| Nine months ended September 30, 2026 cash flows from operating activitiesGAAP | $5.99B | – | – |
| Nine months ended September 30, 2026 capital expendituresother | −2.22B | – | – |
| Nine months ended September 30, 2026 free cash flownon-GAAP | $4.22B | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| U.S. Domestic SegmentRevenue increased 4.5%, driven by a 6.1% increase in revenue per piece. GAAP operating profit was $906 M versus $603 M, while non-GAAP adjusted operating profit was $1,034 M versus $905 M. | $14.87B | – | 4.5% |
| International SegmentRevenue increased 7.1%, driven by a 15.0% increase in revenue per piece. GAAP operating profit was $746 M versus $676 M, and non-GAAP adjusted operating profit was $746 M versus $691 M. | $5.01B | – | 7.1% |
| Supply Chain SolutionsRevenue increased 18.2%, primarily due to growth in forwarding and logistics, including healthcare. GAAP operating profit was $92 M versus $525 M, while non-GAAP adjusted operating profit was $274 M versus $536 M. | $2.98B | – | 18.2% |
Fourth-quarter and full-year 2026 outlook
- RevenueFourth-quarter 2026 consolidated revenue of approximately $25.7 billion; full-year 2026 consolidated revenue of approximately $92.6 billion
- Tax rateEffective tax rate of approximately 23% for the full year 2026
- NoteFourth-quarter 2026 non-GAAP adjusted operating profit of approximately $3.3 billion
- NoteFull-year 2026 non-GAAP adjusted operating profit of approximately $8.75 billion
- NoteFull-year 2026 non-GAAP adjusted diluted EPS of approximately $7.28
- NoteFull-year 2026 non-GAAP adjusted free cash flow of approximately $6.1B
- NoteFull-year 2026 capital expenditures of approximately $3.0 billion
- NoteFull-year 2026 dividend payments of around $5.4 billion, subject to board approval
- NoteFull-year 2026 pension contributions of $1.3 billion
Capital returns
- Full-year 2026 dividend payments of around $5.4 billion, subject to board approval.
What drove it
- Consolidated revenue increased 6.7% to $22.9 billion, with growth across all segments.
- U.S. Domestic revenue growth was driven by a 6.1% increase in revenue per piece.
- International revenue growth was driven by a 15.0% increase in revenue per piece.
- Supply Chain Solutions revenue growth was primarily due to growth in forwarding and logistics, including healthcare.
- UPS stated that premium growth and greater network efficiency drove continued strengthening in business fundamentals.
- During the first nine months of 2026, UPS achieved approximately $1.8 billion of program benefits from Network Reconfiguration and Efficiency Reimagined initiatives and expects nearly $3 billion in full-year 2026 benefits.
Concerns
- Third-quarter GAAP operating margin was 7.6%, compared with 8.4%, and non-GAAP adjusted operating margin was 9.0%, compared with 10.0%.
- Third-quarter non-GAAP adjusted operating profit was $ 2,054 million, compared with $ 2,132 million.
- Supply Chain Solutions GAAP operating profit declined to $92 M from $525 M, and non-GAAP adjusted operating profit declined to $274 M from $536 M.
- Supply Chain Solutions recorded a $182 million goodwill impairment charge in the third quarter.
- Third-quarter GAAP results included a net charge of $279 million, or $0.32 per diluted share.
- Nine-month GAAP operating profit was $ 3,941 million versus $ 5,292 million, while nine-month non-GAAP adjusted operating profit was $ 5,478 million versus $ 5,771 million.
- Nine-month GAAP diluted EPS was $ 3.09 versus $ 4.46, while non-GAAP adjusted diluted EPS was $ 4.52 versus $ 4.78.
- UPS expects non-GAAP adjusted operating expense to exclude between $1.4 and $1.6 billion in costs for full-year 2026, primarily related to employee separation costs and third-party consulting fees.
What to watch
- Delivery against fourth-quarter 2026 revenue guidance of approximately $25.7 billion and non-GAAP adjusted operating profit guidance of approximately $3.3 billion.
- Delivery against full-year 2026 guidance for consolidated revenue of approximately $92.6 billion, non-GAAP adjusted operating profit of approximately $8.75 billion, non-GAAP adjusted diluted EPS of approximately $7.28 and non-GAAP adjusted free cash flow of approximately $6.1B.
- Execution of Network Reconfiguration and Efficiency Reimagined, which is not expected to conclude until the fourth quarter of 2027.
- The expected nearly $3 billion in full-year 2026 program benefits and the expected $1.4 to $1.6 billion of excluded full-year transformation-related costs.
- Supply Chain Solutions profitability following the third-quarter goodwill impairment charge and lower operating profit.
Balance sheet and cash flow
- Nine months ended September 30, 2026 cash flows from operating activities were $ 5,986 million, compared with $ 5,148 million.
- Nine months ended September 30, 2026 capital expenditures were (2,221) million, compared with (2,969) million.
- Nine months ended September 30, 2026 proceeds from disposals of property, plant and equipment were 473 million, compared with 585 million.
- Nine months ended September 30, 2026 other investing activities were (18) million, compared with (20) million.
- Nine months ended September 30, 2026 non-GAAP free cash flow was $ 4,220 million, compared with $ 2,744 million.
Analysis
UPS reported third-quarter 2026 consolidated revenue of $22.9 billion, up 6.7%, with growth in each reported business segment. U.S. Domestic revenue increased 4.5% to $14,865 M, International revenue increased 7.1% to $5,007 M, and Supply Chain Solutions revenue increased 18.2% to $2,981 M. Domestic and International revenue gains were driven by increases in revenue per piece of 6.1% and 15.0%, respectively, while Supply Chain Solutions growth was primarily attributed to forwarding and logistics, including healthcare.
Profitability remained below the prior-year quarter on both reported and adjusted measures. Consolidated GAAP operating profit was $ 1,744 million versus $ 1,804 million, and non-GAAP adjusted operating profit was $ 2,054 million versus $ 2,132 million. GAAP operating margin was 7.6% versus 8.4%, while non-GAAP adjusted operating margin was 9.0% versus 10.0%. GAAP diluted EPS was $ 1.37 versus $ 1.55 and non-GAAP adjusted diluted EPS was $ 1.69 versus $ 1.74.
The segment results show a divide between revenue growth and earnings conversion. U.S. Domestic GAAP operating profit increased to $906 M from $603 M, and adjusted operating profit increased to $1,034 M from $905 M. International GAAP operating profit rose to $746 M from $676 M, with adjusted operating profit rising to $746 M from $691 M. Supply Chain Solutions was the principal earnings drag: GAAP operating profit fell to $92 M from $525 M and adjusted operating profit fell to $274 M from $536 M. The segment recorded a $182 million goodwill impairment charge. Consolidated third-quarter results also included a net charge of $279 million, or $0.32 per diluted share, comprising after-tax transformation strategy costs, the goodwill impairment and a partially offset gain on the sale of MD-11 assets.
Cash generation improved over the first nine months. Cash flows from operating activities were $ 5,986 million versus $ 5,148 million, and non-GAAP free cash flow was $ 4,220 million versus $ 2,744 million. UPS reported approximately $1.8 billion of program benefits in the first nine months from Network Reconfiguration and Efficiency Reimagined and expects nearly $3 billion of full-year benefits. The company expects the related initiative to exclude between $1.4 and $1.6 billion in full-year 2026 costs from non-GAAP adjusted operating expense.
Management raised fourth-quarter and full-year financial guidance. UPS expects fourth-quarter revenue of approximately $25.7 billion and non-GAAP adjusted operating profit of approximately $3.3 billion. Full-year guidance calls for approximately $92.6 billion of consolidated revenue, approximately $8.75 billion of non-GAAP adjusted operating profit, approximately $7.28 of non-GAAP adjusted diluted EPS and approximately $6.1B of non-GAAP adjusted free cash flow. The release also confirms approximately $3.0 billion of capital expenditures, around $5.4 billion of dividend payments subject to board approval, an effective tax rate of approximately 23%, and $1.3 billion of pension contributions.
Management, verbatim
Our third-quarter results demonstrate the continued strengthening of our business fundamentals, driven by premium growth and greater network efficiency. As momentum builds, we are entering the holiday shipping season from a position of strength, with the most automated and efficient network in our history. Given the strength we see in the business, we are raising our full-year financial guidance.
Carol Tomé, UPS chief executive officer
Not in the filing
stated, not guessed- Prior-year quarterly consolidated revenue amount
- Prior-quarter comparisons for reported metrics
- Gross profit and gross margin
- Quarterly operating cash flow and quarterly free cash flow
- Cash balance
- Debt balance
- Share repurchases
- Quarterly dividend amount
- Full-year GAAP revenue, GAAP operating profit, GAAP EPS and GAAP free-cash-flow guidance
- Prior outlook figures needed to compare actual results with prior guidance
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.