NEW YORK, July 28, 2026, 10:03 a.m. EDT
Shares of United Parcel Service, Inc. NYSE:UPS declined 6.1% to approximately $106 as of 10:01 a.m. EDT, erasing an earlier premarket increase following results that topped expectations and a raised outlook.
UPS revised its 2026 revenue outlook higher to $91.2 billion from the previous $89.7 billion. The company now projects adjusted operating profit of $8.65 billion, indicating a margin of approximately 9.5%. This compares to its earlier 9.6% margin forecast.
Revenue outlook increased by $1.5 billion, an approximate gain of 1.7%. Implied adjusted operating profit was up just $39 million, or close to 0.5%. The share drop indicates investors prioritised earnings quality over the headline boost.
Fuel is a major factor behind the difference. Chief Financial Officer Brian Dykes stated that increased fuel costs raised both revenue and expenses. “The net impact to consolidated operating profit dollars was modest,” he said. StockAnalysis
| Investor measure | Earlier or first half | Latest or implied second half | Difference |
|---|---|---|---|
| 2026 revenue forecast | $89.7 billion | $91.2 billion | +1.7% |
| 2026 adjusted operating earnings | $8.61 billion implied | $8.65 billion | +0.5% |
| 2026 adjusted operating margin | 9.6% | Roughly 9.5% implied | Roughly -0.1 point |
| Adjusted operating margin by period | Near 7.8% in H1 | Estimated 11.1% in H2 | Approximately +3.3 points |
UPS guidance and first-half performance serve as the basis for implied estimates. All figures are approximate.
Revenue for the second quarter increased by 7.6% to $22.83 billion, surpassing analysts’ prediction of $21.81 billion. Adjusted earnings reached $1.76 per share, higher than the expected $1.66.
UPS reported a decrease in earnings, with diluted earnings at $0.71 after accounting for $891 million in after-tax transformation charges, the majority connected to employee separation initiatives.
Revenue within the U.S. increased by 6%, with revenue per item up 9.3%. Adjusted domestic margin improved to 8.0%, gaining one percentage point. International revenue saw a 12.5% increase, but margin fell by 1.2 points due to fuel costs.
UPS has finalized its withdrawal from Amazon.com, Inc. NASDAQ:AMZN, eliminating roughly 2 million lower-margin packages each day along with $4.5 billion in associated costs. Amazon accounts for 9% of UPS revenue, down from its peak of over 13%.
Impact from network reductions is becoming evident. UPS eliminated close to 30,000 operational jobs and shuttered 45 facilities in the first half. Automated facilities now process 68.5% of U.S. volume, with costs per piece around 28% less.
The challenge shifts to the latter half of the year. The annual forecast suggests adjusted operating profit of approximately $5.23 billion on revenue of $47.17 billion. This represents a projected margin of 11.1%, compared to about 7.8% in the initial six months.
Dykes said global momentum is expected to give further support. UPS is also looking for a boost from easier year-on-year comparisons following the September 2025 de minimis policy update. However, domestic volume for the third quarter is projected to decline by a mid-single-digit percentage. Domestic margin guidance stands at roughly 7%.
UPS expects U.S. volume in the fourth quarter to increase by roughly 24% compared to the third quarter. This seasonal boost is crucial for the company’s profit outlook. The pace needs to pick up in the fourth quarter.
Shares of FedEx Corp. NYSE:FDX fell around 0.7% just before 10 a.m., while the S&P 500 declined approximately 0.3%. UPS’s steeper drop reflects ongoing concerns specific to the company’s margin goal.
Risks: Higher fuel prices could reduce U.S. shipment demand. UPS also faces the challenge of maintaining prices amid subdued package volumes. If the peak season underperforms, pressure will mount on its margin target for the second half.
