UPS expects third-quarter domestic revenue to be flat but CEO tells CNBC the company is through its 'bumps'
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- UPS posted Q2 adjusted EPS of $1.76 vs. $1.66 expected and revenue of $22.8B vs. $21.81B expected, beating on both lines, though shares fell roughly 4% in early trading.
- UPS net income fell to $604M (71 cents/share) from $1.28B ($1.51/share) in the year-ago period, a significant year-over-year decline.
- UPS expects flat domestic Q3 revenue year-over-year with domestic average daily volume falling in the mid-single digits, citing the deliberate Amazon contract wind-down.
- Carol Tomé told analysts UPS has completed its Amazon "glide-down," eliminating about 2 million pieces per day of "lower-quality Amazon volume" and removing roughly $4.5B in related expenses so far.
- UPS raised its full-year 2026 guidance to consolidated revenue of $91.2B and adjusted diluted EPS of roughly $7.22.
- UPS international revenue jumped 12.5% and domestic revenue rose 6%, with supply chain solutions up 7.8%, partly on healthcare logistics growth above $3B for the second consecutive quarter.
- UPS is seeing momentum on the China-to-U.S. lane, which Tomé said returned to year-over-year growth beginning in May.
Why it matters: Despite beating Q2 estimates and raising full-year 2026 guidance to $91.2B revenue and roughly $7.22 adjusted EPS, UPS shares dropped about 4% as investors weighed flat domestic Q3 guidance against the completed Amazon wind-down that eliminated roughly $4.5B in related expenses. International revenue jumped 12.5% and healthcare logistics topped $3B for a second straight quarter.
