UPS (UPS) Tops Q3 Estimates as Revenue per Package Climbs

UPS (UPS) reported third-quarter revenue of $22.9 billion, up 6.7% year on year, beating the $22.29 billion analysts expected, according to LSEG data cited by CNBC. Adjusted earnings were $1.69 a share, ahead of the $1.63 forecast, and the company raised its full-year guidance. The results came out at about 6 a.m. ET, before trading opens; the shares closed Monday at $100.32, up 1.1% this year.

What stood out

Price, not volume, drove the quarter. In the US, UPS handled 3.3% fewer packages a day than a year earlier, but domestic revenue rose 4.5% to $14.87 billion because revenue per piece climbed 6.1%, the company said. The adjusted operating margin in the US widened to 7.0%.

The international segment grew revenue 7.1% to $5.01 billion, with revenue per piece up 15.0% and an operating margin of 14.9%. Supply Chain Solutions, the logistics and freight-forwarding unit, grew revenue 18.2% to $2.98 billion, helped by healthcare logistics. Its reported profit fell to $92 million from $525 million, because of a $182 million goodwill impairment, a write-down of the value of past acquisitions, and because the year-ago quarter included a $330 million gain from a sale-leaseback.

“As momentum builds, we are entering the holiday shipping season from a position of strength, with the most automated and efficient network in our history,” Chief Executive Carol Tomé said in the results release.

The outlook

UPS raised its full-year guidance for the second quarter in a row, CNBC reported. It now expects 2026 revenue of about $92.6 billion, up from about $91.2 billion, adjusted operating profit of about $8.75 billion, up from about $8.65 billion, adjusted EPS of about $7.28, up from about $7.22, and adjusted free cash flow of about $6.1 billion.

For the fourth quarter, the busiest of UPS’s year, it expects revenue of about $25.7 billion, about 5% more than the $24.48 billion it reported a year earlier, by our calculation from its filings. It kept its plans for about $3.0 billion of capital spending and about $5.4 billion of dividends this year.

Our take

The good: UPS is earning more on each package while carrying fewer, which is the point of a turnaround that included cutting its Amazon volume on purpose. A second guidance raise in a row says the strategy is working. The bad: the GAAP numbers still carry restructuring costs and a write-down, and US volume is still falling. What to watch is whether the holiday quarter delivers the $25.7 billion UPS now promises.