UPS · United Parcel Service, Inc.

UPS's Q1 2026 results reflect a transitional quarter amid ongoing transformation initiatives, with consolidated revenues of $21.2 billion declining 1.6% year-over-year primarily due to expected volume declines, partially offset by 7.7% higher average revenue per piece. U.S. Domestic Package saw a 2.3% revenue drop to $14.1 billion, driven by 8.0% lower average daily volume, though revenue per piece rose 6.5%; operating profit fell 47.4% to $515 million (3.6% margin) from cost pressures. International Package grew revenues 3.8% to $4.5 billion on 10.7% revenue per piece gains despite 6.0% volume decline, maintaining strong 12.0% operating margin. Supply Chain Solutions revenues declined 6.5% to $2.5 billion due to Mail Innovations volume drop, but operating profit surged to $205 million (8.1% margin) from prior year impairments.

GAAP operating profit of $1.27 billion (6.0% margin) included $55 million in transformation costs related to Network Reconfiguration and Efficiency Reimagined, yielding non-GAAP adjusted figures of $1.32 billion (6.2% margin). Diluted EPS was $1.02 GAAP ($1.07 adjusted), down from $1.40 ($1.49 adjusted) YoY, with after-tax transformation charges of $42 million or $0.05 per share. CEO Carol Tomé highlighted flawless execution of strategic actions, expecting revenue and profit growth plus margin expansion in Q2.

The company reaffirmed FY2026 guidance for ~$89.7 billion revenue and ~9.6% non-GAAP operating margin, with $3.0 billion capex and $5.4 billion dividends. Transformation initiatives achieved $600 million Q1 savings, targeting $3 billion full-year, excluding $1.3-$1.5 billion program costs mainly from employee separations and consulting. Balance sheet remains solid with $5.8 billion cash; operating cash flow of $2.2 billion supported $1.3 billion dividends. Investors should note forward-looking risks including economic conditions, competition, and transformation execution.