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UPS Beats Revenue Expectations Amid Q1 Volatility
Logistics Giant Focuses on Transformation Strategy as It Shifts Some Cargo, Tightens Commitment to Key Business Segments
Key Takeaways:
- UPS reported first-quarter results April 28 mostly in line with analyst expectations as it pressed ahead with a multiyear transformation.
- Net income fell to $864 million on $21.2 billion revenue, roughly matching forecasts, as cost pressures and strategic shifts weighed on U.S. domestic performance.
- CEO Carol Tomé said UPS remains on track for $3 billion in cost cuts while prioritizing premium small and medium-size businesses, business-to-business and healthcare customers amid fuel and demand uncertainties.
UPS Inc. pressed ahead with an ongoing transformation strategy while contending with a challenging first quarter, the company reported April 28.
“This past quarter brought significant external challenges, from volatile global markets to rising fuel costs,” UPS CEO Carol Tomé said during a call with investors. “The first quarter of 2026 marked a critical transition period for our company, one in which we needed to flawlessly execute several major strategic actions.”
The Atlanta-based shipping and logistics company reported net income of $864 million, or $1.02 a diluted share, for the three months ending March 31. That compared with $1.19 billion, $1.40, during the same period a year earlier. Total revenue fell 1.6% to $21.2 billion from $21.6 billion.
The results were about in line with Wall Street expectations. Analysts had forecast earnings of $1.06 per share on revenue of $21.08 billion, according to the Zacks Consensus Estimate.
UPS has been pursuing a transformation strategy aimed at reshaping its organizational structure, processes, technology and business mix. Tomé said the initiative included further reductions in Amazon volume, a shift of some last-mile ground deliveries back to the U.S. Postal Service and the launch of a voluntary driver buyout program during the quarter.
“Based on these actions and more, we are firmly on track to achieve our $3 billion cost out target for the year,” Tomé said. “Further, we began scaling back leased aircraft as we retired our MD-11 fleet and took delivery of new 767s, and we continue to capitalize on trade lane shifts resulting from last year’s trade policy changes. It is a dynamic environment, but even against that backdrop, our underlying business performed exceptionally well.” Tomé said the results exceeded internal expectations but noted the quarter deviated from typical seasonal patterns because of cost pressures.
Looking ahead, she outlined priorities for driving revenue growth and boosting margins, including improving volume mix and retaining existing customers.
“We’re focused on premium segments like [small- and medium-size businesses], [business-to-business] and complex healthcare,” Tomé said. “We’re seeing favorable mix improvements with SMB and B2B volume, representing a larger share of total U.S. volume, and premium customer wins are driving meaningful revenue per piece growth.”
She added, “We’ve now had three quarters in a row of performance exceeding our expectations. There are a few external factors that we are watching that could impact demand, especially higher fuel costs, stemming from the conflict in the Middle East, and U.S. consumer confidence, which is at historic lows. But these external pressures won’t deter us.”
UPS Releases 1Q 2026 Earnings https://t.co/DThAkR1DnW — UPS News (@UPS_News) April 28, 2026
Revenue by Segment
- U.S. domestic fell 2.3% to $14.1 billion from $14.5 billion a year earlier. Operating profit dropped 47.4% to $515 million from $979 million.
- International rose 3.8% to $4.54 billion from $4.37 billion. Operating profit declined 14.7% to $547 million from $641 million.
- Supply Chain Solutions declined 6.5% to $2.54 billion from $2.71 billion. Operating profit jumped 346% to $205 million from $46 million.
UPS ranks No. 1 on the Transport Topics Top 100 list of the largest for-hire carriers in North America. UPS Supply Chain Solutions is No. 6 on the TT Top 100 list of the largest logistics companies. The company also ranks No. 2 on the TT Top 50 list of the largest global freight carriers.
