Key financial results
- Consolidated revenue was $22.9 billion, representing a 6.7% increase compared to the third quarter of last year.
Revenue grew across all 3 segments driving consolidated revenue to $22.9 billion, up 6.7% from last year.
- Consolidated operating profit reached $2.1 billion for the quarter.
Consolidated operating profit was $2.1 billion.
- Diluted earnings per share were $1.69.
diluted earnings per share were $1.69.
- GAAP results included a net charge of $279 million, or $0.32 per diluted share.
For the third quarter of 2026, a GAAP results include a net charge of $279 million or $0.32 per diluted share
- The net charge comprised $130 million in transformation strategy costs and a $182 million goodwill impairment in Supply Chain Solutions, partially offset by a $33 million gain on the sale of MD-11 assets.
Business segment results
- U.S. Domestic: U.S. Domestic revenue was $14.9 billion, an increase of 4.5% year-over-year, despite a 3.3% decline in average daily volume.
U.S. domestic generated $14.9 billion in revenue, an increase of 4.5% year-over-year, overcoming the 3.3% decline in average daily volume.
- U.S. Domestic: U.S. Domestic operating profit grew 14.3% to over $1 billion, with an operating margin of 7%, up 60 basis points.
The U.S. Domestic segment delivered over $1 billion in operating profit, a 14.3% increase from last year.
- International: International revenue was $5 billion, up 7.1% year-over-year, driven by a 15% increase in revenue per piece.
International generated $5 billion in revenue, an increase of 7.1% year-over-year.
- International: International operating profit was $746 million, an increase of $55 million year-over-year, with an operating margin of 14.9%.
Operating profit in the International segment was $746 million, an increase of $55 million year-over-year.
- Supply Chain Solutions: Supply Chain Solutions revenue was $3 billion, an increase of $459 million compared to the prior year.
Total Supply Chain Solutions revenue was $3 billion, an increase of $459 million versus last year.
- Supply Chain Solutions: Supply Chain Solutions operating profit was $274 million with an operating margin of 9.2%.
Supply Chain Solutions generated an operating profit of $274 million and operating margin was 9.2%.
- Supply Chain Solutions: Forwarding revenue increased 17.5% year-over-year, while logistics revenue increased 17.2%.
- Supply Chain Solutions: MUPS Digital, which includes Roadie and Happy Returns, saw revenue growth of nearly 50% compared to the third quarter of 2025.
Capital allocation
- Year-to-date cash from operations was $6 billion, with free cash flow of $4.2 billion.
Year-to-date, we've generated $6 billion in cash from operations and free cash flow of $4.2 billion
- The company paid $4.1 billion in dividends year-to-date and expects to pay approximately $5.4 billion for the full year 2026.
so far this year, UPS has paid $4.1 billion in dividends.
- UPS issued $1.3 billion in debt during the quarter to refinance maturities.
In the third quarter, we successfully issued $1.3 billion in debt to refinance maturity
- The company contributed $450 million of UPS bonds to its pension asset portfolio to strengthen funded status.
to complete a pension contribution of $450 million of UPS bonds to our pension asset portfolio.
- Management confirmed the dividend remains secure.
So clearly Ari, our dividend is safe and secure.
Industry trends and dynamics
- Industry forecasts for holiday online retail sales project an average increase of approximately 9% compared to last year.
Industry forecasts for holiday online retail sales project an average increase of approximately 9% compared to last year.
- The company identified a $15 billion logistics opportunity specifically related to data center growth.
we estimate the logistics opportunities associated with data centers alone, is $15 billion.
- Healthcare logistics is a key growth area, with complex healthcare logistics projected to grow around 6% per year.
their projected growth rate in complex healthcare logistics is around 6% per year.
- Consumer spending remains resilient, supported by stable employment rates.
as long as the employment rate stays fairly stable, and it appears to be fairly stable in our country, consumers are going to spend
Competitive landscape
- Management stated they have not seen measurable impact from Amazon shipping since the announcement made earlier in the summer.
we haven't seen any measurable or meaningful impact to our business since the announcement they made earlier in the summer.
- The pricing environment is described as rational among all competitors.
it seems like the pricing environment is rational amongst all competitors.
- UPS differentiates itself from Amazon through its network capabilities, including ground guarantees and reverse logistics.
Our networks are just different. They have a linear network. We provide reverse logistics.
Macroeconomic environment
- International volume was impacted by geopolitical tensions.
total international average daily volume declined 8.7% compared to the third quarter of last year, primarily due to geopolitical tensions.
- The elimination of the de minimis exemption in Europe caused a sharp decline in volume in July, but trends improved monthly thereafter.
When the de minimis exemption was eliminated in Europe, the volume had a sharp decline. But every month following, it's gotten better.
Growth opportunities and strategies
- The company implemented a new global operating model to improve consistency and agility.
This new model enables UPS to serve customers with greater consistency, agility and scale.
- RFID technology is increasing productivity, with 4 billion RFID-enabled packages expected to be delivered by year-end.
By the end of the year, we expect to have delivered more than 4 billion RFID-enabled packages.
- SMBs represented 35.1% of total U.S. volume in the third quarter.
SMBs, including platforms represented 35.1% of total U.S. volume in the third quarter
- Healthcare revenue exceeded $3 billion for the third consecutive quarter.
health care revenue exceeded $3 billion for the third consecutive quarter
- The Digital Access Program (DAP) reached $1.4 billion in global revenue.
global DAP revenue reached $1.4 billion.
Financial guidance and outlook
- Full year 2026 consolidated revenue is expected to be approximately $92.6 billion, with operating profit of approximately $8.75 billion.
For the full year 2026, we now expect consolidated revenue of approximately $92.6 billion and consolidated operating profit of approximately $8.75 billion.
- Full year 2026 diluted earnings per share are expected to be approximately $7.28.
This implies full year diluted earnings per share of approximately $7.28.
- Fourth quarter 2026 consolidated revenue is expected to be approximately $25.7 billion, with operating profit of approximately $3.3 billion.
we now expect consolidated revenue of approximately $25.7 billion, up approximately 5% year-over-year and consolidated operating profit of approximately $3.3 billion.
- Fourth quarter segment expectations: U.S. Domestic revenue up 3% with 10.5% margin; International revenue up 7% with 20% margin; Supply Chain Solutions revenue up nearly 13% with 12.2% margin.
we expect fourth quarter revenue in international to be up approximately 7% and operating margin of approximately 20%.
- Full year 2026 free cash flow is expected to be approximately $6.1 billion.
For the full year 2026, we now expect free cash flow to be approximately $6.1 billion
- Full year 2026 capital expenditures are expected to be approximately $3 billion.
Capital expenditures are still expected to be around $3 billion.
Operational Efficiency and Transformation
- The Driver Choice program concluded in the third quarter with approximately 1,500 participants exiting the company.
In the third quarter, we wrapped up the final phase of the Driver Choice program with approximately 1,500 participants exiting the company
- Management confirmed they remain on track to meet the $3 billion cost savings objective.
we feel comfortable with the $3 billion objective.
- The company is transitioning to a sensing network to eliminate billions of scans and improve productivity.
we are moving from a scanning to a sensing network.
Q3 2026 results
| Metric | Result | Change |
|---|---|---|
| Consolidated Revenue | $22.9 billion | +6.7% |
| Consolidated Operating Profit | $2.1 billion | Not stated |
| U.S. Domestic Operating Profit | Over $1 billion | +14.3% |
| International Revenue | $5 billion | +7.1% |
| Supply Chain Solutions Revenue | $3 billion | +$459 million |
| Diluted EPS | $1.69 | Not stated |
How management sounded
Positive (+45 on our -100 to +100 scale). Management expressed high confidence in their strategy, citing an inflection point in U.S. domestic performance and raised full-year guidance, though they remain realistic about ongoing volume headwinds from Amazon. Management sounded more upbeat than on 62% of the 302 calls we cover; most companies sound positive on their own calls, so the comparison says more than the label.
Read the analyst Q&A summary and guidance and outlook for this call.
What to watch before the next call
- The impact of the new global operating model on efficiency and speed in 2027.
- The progress of the sensing network and RFID implementation, which is expected to reach 6 million packages per day next year.
- The finalization of the $3 billion cost savings objective as the Amazon volume reduction concludes.
Earlier calls
- Q2 2026 (Jul 28, 2026), tone Balanced: UPS reported $22.8 billion in revenue and $2.1 billion in operating profit, raising full-year guidance to $91.2 billion in revenue and $7.22 per share after completing its Amazon volume reduction.
