TLDR
- UPS forecasts $89.7 billion in 2026 revenue, beating Wall Street’s $88.05 billion estimate
- Adjusted Q4 earnings of $2.38 per share exceeded analyst expectations of $2.20
- MD-11 aircraft fleet retirement completed with $137 million charge in fourth quarter
- Company eliminated 48,000 jobs and closed 93 buildings as part of ongoing restructuring
- Stock jumped 3.7% in premarket hours following the earnings announcement
UPS delivered a solid earnings beat and raised revenue expectations for 2026. The company’s strategy to focus on profitable deliveries is starting to show results.
Fourth-quarter profit reached $1.79 billion, or $2.10 per share. That represents an increase from $1.72 billion, or $2.01 per share, in the prior year period.
The quarter included $238 million in special charges. A $137 million write-off tied to MD-11 fleet retirement made up the largest portion.
United Parcel Service, Inc., UPS
The company finished phasing out its MD-11 aircraft during the fourth quarter. This followed a fatal November crash of a 34-year-old MD-11 that killed at least 12 people.
Excluding one-time items like the fleet write-off and approximately $100 million in restructuring costs, earnings hit $2.38 per share. Analysts surveyed by FactSet expected $2.20 per share.
Revenue declined 3.2% to $24.48 billion compared to $25.3 billion last year. The result exceeded Wall Street projections of $24.01 billion.
Restructuring Drives Efficiency Gains
The revenue decrease stems from UPS’s deliberate reduction of Amazon volumes. The e-commerce giant previously ranked as the company’s largest client.
UPS trimmed approximately 48,000 positions from its workforce last year. Management roles represented roughly 14,000 of those reductions.
Operations ceased at 93 leased and owned facilities. Automation investments have enabled the company to maintain service levels with fewer buildings.
Management plans to continue evaluating its network for additional closure opportunities. Volume trends will guide future facility decisions.
Revenue Outlook Exceeds Forecasts
UPS projects 2026 revenue of approximately $89.7 billion. This tops the $88.05 billion consensus estimate from analysts.
CEO Carol Tomé called 2026 “an inflection point” as the Amazon volume reduction concludes. She expects the company to deliver sustained margin expansion going forward.
The company forecasts a 9.6% adjusted operating margin for 2026. Capital spending plans call for about $3 billion in expenditures.
UPS intends to distribute around $5.4 billion in dividends, subject to board approval. The guidance reflects confidence in cash flow generation.
Trading Activity
Shares rose 3.7% to $111.00 in premarket trading on Tuesday. Rival FedEx posted gains of about 1% during the same timeframe.
