UPS raises 2026 outlook, says it will make more money on fewer holiday packages

As of 6:11 p.m. ET, Tuesday, Oct. 27, 2026

UPS raised its full-year 2026 forecasts on Tuesday after third-quarter results that executives said reflect its shift toward more profitable packages. The company told Reuters it expects to earn more during the holiday peak while delivering slightly fewer parcels.

UPS now expects 2026 consolidated revenue of about $92.6 billion, adjusted operating profit of about $8.75 billion, adjusted earnings of about $7.28 a share and adjusted free cash flow of about $6.1 billion, according to its earnings release. Its July forecasts had been $91.2 billion in revenue and $7.22 a share, Reuters reported. For the fourth quarter, UPS expects revenue of about $25.7 billion and adjusted operating profit of about $3.3 billion.

Fewer packages, more revenue per piece

UPS expects total average daily volume to fall 1.3% in the fourth quarter as it becomes more selective about the packages it delivers. Executives forecast a roughly 3% rise in domestic revenue and about 7% growth in international revenue, Reuters reported.

"We're dispelling the old belief that all packages were created equal and that volume solves all problems," Chief Executive Carol Tomé told Reuters. Chief Financial Officer Brian Dykes said a widening gap between revenue per parcel and cost per parcel will improve margins, and that lower holiday volume lets UPS spend less on labor and on truck and plane leases for the seasonal surge.

UPS has closed facilities and cut thousands of jobs after scaling back deliveries for Amazon, its largest customer, and said it completed that reduction in the second quarter, Reuters reported. Tomé said holiday demand looks strong as U.S. consumers keep spending despite inflation and higher gas prices.

Third quarter

Third-quarter consolidated revenue rose 6.7% to $22.9 billion, UPS said. Operating profit was $1.7 billion, or $2.1 billion on an adjusted basis. Earnings were $1.37 a diluted share, or $1.69 adjusted. Reported results included a net charge of $279 million, or 32 cents a share, made up of transformation costs, a $182 million goodwill impairment in Supply Chain Solutions and a $33 million gain on the sale of MD-11 assets.

The adjusted figure compared with $1.74 a share a year earlier and analysts' average estimate of $1.63, according to Reuters. In U.S. Domestic, revenue rose 4.5% on a 6.1% increase in revenue per piece, and the adjusted operating margin was 7.0%, up from 6.4% a year earlier per Reuters. International revenue rose 7.1% on a 15.0% rise in revenue per piece, with a 14.9% operating margin. Supply Chain Solutions revenue rose 18.2%, led by forwarding and logistics, including health care.

"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," Tomé said in the release.

UPS said its cost-saving initiatives produced about $1.8 billion in benefits in the first nine months of the year, and it expects nearly $3 billion for the full year. Tomé also told Reuters that data center construction is a significant opportunity. Rival FedEx reports results on Wednesday, Reuters said.