UPS Beats Q2 Estimates, Lifts Guidance; Shares Fall 8%
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- UPS posted Q2 revenue of $22.8 billion and adjusted EPS of $1.76, topping Wall Street estimates of $21.81 billion and $1.66 respectively.
- UPS raised full-year 2026 guidance to consolidated revenue of $91.2 billion and adjusted diluted EPS of roughly $7.22 per share.
- UPS shares fell roughly 8% in early trading despite the beat, while GAAP net income plunged to $604 million from $1.28 billion a year earlier.
- CEO Carol Tomé called it the "fourth straight quarter of delivering results that exceeded our expectations" and said UPS grew volume in Q2 once the intentional Amazon volume reduction was excluded.
- UPS expects domestic Q3 revenue to be flat year-over-year with average daily volume falling mid-single digits, citing seasonal decline and its deliberate "glide-down" with Amazon.
- UPS has shed roughly 2 million pieces per day of Amazon volume and removed about $4.5 billion in related expenses, with network reconfiguration benefits reaching $1.2 billion year-to-date against a $3 billion year-end target.
- UPS posted a 6% domestic revenue rise, a 12.5% jump in international revenue, and 7.8% growth in supply chain solutions, with healthcare logistics surpassing $3 billion for a second straight quarter.
Why it matters: UPS topped consensus and lifted guidance, yet shares dropped 8% — investors appear to be pricing in the flat domestic Q3 outlook and the steep GAAP net income decline from $1.28B to $604M. The completed Amazon glide-down strips roughly 2 million daily pieces and $4.5B in expenses from the network, leaving UPS more dependent on higher-yield healthcare and international lanes to justify the multiple.
