UPS reported second-quarter 2026 consolidated revenue of $22.8 billion as growth across its U.S. Domestic, International and Supply Chain Solutions businesses helped the logistics company raise its full-year financial outlook.
The company generated $930 million in GAAP operating profit and $2.1 billion in adjusted operating profit. Its GAAP operating margin was 4.1%, while its adjusted operating margin reached 9.2%.
UPS reported diluted earnings of $0.71 per share on a GAAP basis and adjusted diluted earnings of $1.76 per share. Adjusted net income totaled approximately $1.5 billion, compared with about $1.31 billion in the second quarter of 2025.
The substantial difference between GAAP and adjusted results primarily reflected transformation expenses associated with UPS’ efforts to reduce its workforce and reconfigure its logistics network.
Second-quarter GAAP results included $891 million in after-tax transformation charges, equivalent to $1.05 per diluted share. The expenses primarily consisted of employee separation costs associated with the recently completed Driver Choice Program.
UPS said it successfully completed the planned reduction in business from Amazon and the related reconfiguration of its network. The company entered the second half of 2026 with stronger operating momentum and increased its forecasts for revenue, adjusted operating profit and adjusted earnings per share.
UPS now expects full-year consolidated revenue of approximately $91.2 billion, up from its previous outlook. It is targeting an adjusted operating profit of approximately $8.65 billion and an adjusted diluted earnings per share of approximately $7.22.
The company maintained its expectation for approximately $3 billion in capital expenditures during 2026. UPS also expects to make approximately $5.4 billion in dividend payments, subject to board approval, and continues to anticipate an effective tax rate of about 23%.
UPS’ U.S. Domestic segment generated second-quarter revenue of approximately $14.93 billion, increasing 6% from $14.08 billion during the same period of 2025.
The revenue improvement was driven by a 9.3% increase in revenue per package, indicating that pricing and changes in the company’s shipment mix more than offset the effects of its planned volume reductions.
U.S. Domestic GAAP operating profit fell to $16 million from $916 million because the segment absorbed a significant portion of UPS’ transformation expenses.
On an adjusted basis, U.S. Domestic operating profit increased to approximately $1.19 billion from $982 million. The segment’s adjusted operating margin expanded to 8% from 7% during the prior-year quarter.
The adjusted results provide a clearer view of the segment’s underlying operations by excluding the costs of workforce reductions and network restructuring. However, those transformation expenses still represent real cash and accounting costs associated with UPS’ effort to operate a smaller and more efficient delivery network.
UPS has been consolidating sorting operations, reducing facilities, vehicles, aircraft and employees, and redesigning internal processes as it lowers the volume handled for its largest customer.
The company achieved approximately $1.2 billion in benefits from its network reconfiguration and efficiency programs during the first six months of 2026. UPS expects those initiatives to generate approximately $3 billion in benefits for the full year.
UPS expects to exclude approximately $1.3 billion to $1.5 billion in transformation-related costs from its full-year adjusted operating expenses. About $1.1 billion of that amount is associated with the Driver Choice Program.
The company had incurred approximately $1.8 billion in cumulative costs related to these initiatives through June 30, including about $1.2 billion during 2026. UPS expects the broader transformation programs to conclude by 2027.
The International segment reported revenue of approximately $5.04 billion, representing an increase of 12.5% from $4.49 billion in the second quarter of 2025.
Revenue per package increased 18.9%, supporting growth despite a complex global trade environment. International operating profit totaled $623 million, compared with $672 million a year earlier, while the operating margin was 12.4%.
The lower International operating profit despite higher revenue suggests that expenses and changes in shipment mix reduced the amount of incremental revenue converted into earnings.
Supply Chain Solutions produced revenue of approximately $2.86 billion, increasing 7.8% from $2.65 billion during the prior-year period. UPS attributed the improvement primarily to growth in forwarding and logistics, including healthcare-related services.
Supply Chain Solutions operating profit increased to $291 million from $234 million on a GAAP basis and $212 million on an adjusted basis in the second quarter of 2025. Its operating margin reached 10.2%.
The segment includes logistics operations that complement UPS’ core package-delivery network. Healthcare logistics has become an important strategic category because pharmaceutical, biotechnology and medical-device shipments can require specialized handling, temperature controls and greater visibility.
UPS’ second-quarter performance shows the company progressing through a major operational transition. The logistics provider is attempting to reduce its dependence on lower-margin volume, improve revenue per package and align the size of its network with a changing customer mix.
The raised outlook indicates that management expects the benefits of pricing, network efficiencies and growth in selected logistics markets to continue during the second half of the year.
KEY QUOTE:
“Our second-quarter results marked an expected and significant shift in our performance.”
“We entered the second half of the year with strong momentum.”
Carol Tomé, CEO of UPS
