Did UPS maintain its full-year 2026 outlook?

Yes. UPS reaffirmed its 2026 targets of approximately $89.7 billion in consolidated revenue and a 9.6% non-GAAP adjusted operating margin. It also confirmed expected capex of about $3.0 billion, dividends of about $5.4 billion, and an effective tax rate of about 23%.

What caused the decline in U.S. Domestic profitability?

Average daily U.S. Domestic volume fell 8.0%, primarily from planned volume declines from the company's largest customer. Operating expenses rose 1.0% on a GAAP basis while revenue fell 2.3%, and adjusted cost per piece increased 9.5% to $13.35. Revenue per piece grew 6.5%, which partly offset the volume loss but not the higher cost per piece.

What are the transformation and network reconfiguration costs and savings?

In Q1 2026, the company incurred $55 million of pre-tax Network Reconfiguration and Efficiency Reimagined costs ($42 million after tax, or $0.05 per diluted share) and achieved about $600 million of program cost savings. It expects about $3 billion of full-year year-over-year cost savings in 2026 and $1.3 to $1.5 billion of excluded costs in 2026, of which $1.2 billion relates to the Driver Choice Program. The initiatives are expected to conclude by 2027.

Why did Supply Chain Solutions profit improve even though revenue declined?

Supply Chain Solutions revenue fell 6.5%, mainly from lower volume in the Mail Innovations business. Its GAAP operating profit rose to $205 million from $46 million, but the year-ago period included $39 million of goodwill and asset impairment charges. On an adjusted basis, operating profit rose 110% to $206 million, and the adjusted margin improved to 8.1% from 3.6%.

What does management expect for the second quarter?

CEO Carol Tomé said UPS expects to return to consolidated revenue and operating profit growth, as well as adjusted operating margin expansion, in the second quarter of 2026. The filing does not provide specific second-quarter numerical guidance.

UPS 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed April 28, 2026. Cited figures are marked; the original filing is the authoritative source.

UPS reported first-quarter 2026 consolidated revenue of $21.2 billion^a, down 1.6% year over year.

GAAP operating profit fell 23.9% to $1.27 billion^b, and GAAP operating margin compressed to 6.0% from 7.7%. Non-GAAP adjusted operating profit was $1.32 billion, with an adjusted margin of 6.2% versus 8.2% a year earlier. GAAP diluted EPS was $1.02 (down 27.1%) and non-GAAP adjusted diluted EPS was $1.07 (down 28.2%).

Results were pressured by an 8.0%^c decline in average daily U.S. Domestic package volume, which management attributed to planned volume reductions from its largest customer and the reconfiguration of its network. U.S. Domestic adjusted operating margin fell to 4.0% from 7.0%, and U.S. Domestic cost per piece rose 9.5% on an adjusted basis. Revenue per piece rose 6.5% in U.S. Domestic and 7.7% consolidated, which partly offset the volume decline.

Segment results were mixed. International revenue grew 3.8% on a 10.7% increase in revenue per piece, but its adjusted operating margin declined to 12.1% from 15.0%. Supply Chain Solutions revenue fell 6.5%, yet its adjusted operating profit more than doubled to $206 million^d, lifting its adjusted margin to 8.1% from 3.6%, largely because 2025 included impairment charges.

Free cash flow was $1.28 billion versus $1.49 billion, and the company repurchased no shares in the quarter after buying back $1.0 billion of stock in Q1 2025. Management reaffirmed full-year 2026 targets of approximately $89.7 billion in revenue, a 9.6% non-GAAP adjusted operating margin, roughly $3.0 billion in capital expenditures, and about $5.4 billion in dividends. Management expects a return to revenue and operating profit growth and adjusted margin expansion in the second quarter.

For investors, the central question is whether the transformation program and the network reconfiguration can restore margins as volume declines from the largest customer continue. The company cites about $600 million of program cost savings achieved in Q1 2026 and expects roughly $3 billion of year-over-year savings in 2026.

It also expects $1.3 to $1.5 billion of excluded program costs in 2026, of which $1.2 billion relates to the Driver Choice Program, with the initiatives concluding by 2027. The filing does not provide consensus comparisons, so the reaffirmed guidance must be weighed against the sharp year-over-year earnings decline.

02—Key points

Key Highlights

Consolidated revenue of $21.2 billion, down 1.6% year over year; consolidated volume fell 7.8% while revenue per piece rose 7.7% to $15.32.
GAAP operating margin of 6.0% (vs. 7.7%) and non-GAAP adjusted operating margin of 6.2% (vs. 8.2%); adjusted operating profit of $1.32 billion, down 25.0%.
GAAP diluted EPS of $1.02 (vs. $1.40) and non-GAAP adjusted diluted EPS of $1.07 (vs. $1.49); transformation charges were $0.05 per share.
U.S. Domestic Package: revenue down 2.3% to $14.1 billion, average daily volume down 8.0%, adjusted operating margin down to 4.0% from 7.0%.
International Package: revenue up 3.8% to $4.5 billion, with a 12.1% adjusted operating margin (vs. 15.0%); Supply Chain Solutions adjusted operating profit rose 110% to $206 million.
Free cash flow of $1.28 billion (vs. $1.49 billion); no share repurchases in Q1 2026 compared with $1.0 billion in Q1 2025; dividends of $1.35 billion paid.
2026 guidance reaffirmed: revenue of about $89.7 billion, non-GAAP adjusted operating margin of about 9.6%, capex of about $3.0 billion, dividends of about $5.4 billion, and an effective tax rate of about 23%.

03—Questions

Frequently Asked Questions

Did UPS maintain its full-year 2026 outlook?
Yes. UPS reaffirmed its 2026 targets of approximately $89.7 billion in consolidated revenue and a 9.6% non-GAAP adjusted operating margin. It also confirmed expected capex of about $3.0 billion, dividends of about $5.4 billion, and an effective tax rate of about 23%.
What caused the decline in U.S. Domestic profitability?
Average daily U.S. Domestic volume fell 8.0%, primarily from planned volume declines from the company's largest customer. Operating expenses rose 1.0% on a GAAP basis while revenue fell 2.3%, and adjusted cost per piece increased 9.5% to $13.35. Revenue per piece grew 6.5%, which partly offset the volume loss but not the higher cost per piece.
What are the transformation and network reconfiguration costs and savings?
In Q1 2026, the company incurred $55 million of pre-tax Network Reconfiguration and Efficiency Reimagined costs ($42 million after tax, or $0.05 per diluted share) and achieved about $600 million of program cost savings. It expects about $3 billion of full-year year-over-year cost savings in 2026 and $1.3 to $1.5 billion of excluded costs in 2026, of which $1.2 billion relates to the Driver Choice Program. The initiatives are expected to conclude by 2027.
Why did Supply Chain Solutions profit improve even though revenue declined?
Supply Chain Solutions revenue fell 6.5%, mainly from lower volume in the Mail Innovations business. Its GAAP operating profit rose to $205 million from $46 million, but the year-ago period included $39 million of goodwill and asset impairment charges. On an adjusted basis, operating profit rose 110% to $206 million, and the adjusted margin improved to 8.1% from 3.6%.
What does management expect for the second quarter?
CEO Carol Tomé said UPS expects to return to consolidated revenue and operating profit growth, as well as adjusted operating margin expansion, in the second quarter of 2026. The filing does not provide specific second-quarter numerical guidance.

04—Continue

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