United Parcel Service 8-K

EarningsGuidance raisedRestructuring

Higher revenue per piece offset lower package volume; Driver Choice Program separation costs hit GAAP profit even as UPS raised its FY2026 outlook.

Filed 2026-07-28 06:03 ET

Summary

Q2 2026 results with a raised FY2026 outlook. Revenue grew 7.6% Y/Y, while GAAP operating profit and net income fell; non-GAAP adjusted operating profit and EPS increased. UPS attributed revenue growth to higher revenue per piece despite lower package volume and reported substantial transformation costs, primarily employee separation costs.

Key Figures

Metric Q2 2026 Q2 2025 Y/Y
Revenue $22.8B $21.2B 7.6%
Operating profit, GAAP $930M $1.82B (49.0%)
Operating profit, non-GAAP adjusted $2.10B $1.88B 12.0%
Net income, GAAP $604M $1.28B (52.9%)
Net income, non-GAAP adjusted $1.50B $1.31B 13.9%
Diluted EPS, GAAP $0.71 $1.51 (53.0%)
Diluted EPS, non-GAAP adjusted $1.76 $1.55 13.5%
  • Revenue rose across all three businesses, driven in part by higher revenue per piece: U.S. Domestic +9.3% and International +18.9%; consolidated package volume declined 3.7%. Domestic GAAP operating profit included $1.17B of transformation costs, chiefly employee separation costs from the Driver Choice Program; the related after-tax charge was $891M, or $1.05 per diluted share.
  • For the six months ended June 30, GAAP net income was $1.47B vs $2.47B Y/Y; operating cash flow was $3.08B vs $2.67B, and non-GAAP free cash flow was $1.57B vs $742M.
  • UPS expects FY2026 transformation-strategy costs excluded from non-GAAP adjusted operating expense of $1.3B–$1.5B, including $1.1B related to the Driver Choice Program. It had incurred $1.8B through June 30, including $1.2B in 2026; the initiatives are expected to conclude by 2027.

Guidance

Metric Period Guidance Prior Direction
Consolidated revenue FY2026 ≈$91.2B — Raised
Consolidated operating profit, non-GAAP adjusted FY2026 ≈$8.65B — Raised
Diluted EPS, non-GAAP adjusted FY2026 ≈$7.22 — Raised
Capital expenditures FY2026 ≈$3.0B — Reaffirmed
Dividend payments, subject to board approval FY2026 ≈$5.4B — Reaffirmed
Effective tax rate FY2026 ≈23.0% — Reaffirmed
Transformation-initiative benefits FY2026 ≈$3B — —

Investor Takeaways

  • Track second-half performance against the raised FY2026 revenue, non-GAAP adjusted operating profit and diluted EPS outlook.
  • Watch whether transformation initiatives deliver the expected FY2026 benefits and whether the company completes them by 2027.
  • Board approval remains applicable to the expected FY2026 dividend payments.

The summary is written by an AI model reading the filing.

Model 005 · prompt 01d34d48e3

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