UPS earnings arrive before the market opens on Tuesday, Oct. 27, with a call at 8:30 a.m. ET. Analysts expect adjusted earnings of about $1.62 a share on revenue near $22.2 billion, per MarketBeat’s consensus. A year ago UPS earned $1.74 on $21.42 billion. That’s roughly a 7% drop in profit per share on 3.6% more revenue. So the Street wants less profit from a bigger top line, and that odd gap is the whole story of UPS earnings this season. Tuesday’s call should show which side wins.
What UPS reported in July
The second-quarter release showed revenue of $22.8 billion and adjusted earnings of $1.76 a share, on an adjusted operating margin of 9.2%. GAAP looked much worse: a $930 million operating profit and a 4.1% margin. The difference was $891 million of after-tax transformation charges, or $1.05 a share.
Every segment grew. U.S. Domestic revenue rose 6.0% to $14.93 billion, helped by a 9.3% jump in revenue per piece, though its GAAP margin was just 0.1% against 8.0% adjusted. International climbed 12.5% to $5.04 billion at a 12.4% margin, with revenue per piece up 18.9%. Supply Chain Solutions added 7.8% to $2.86 billion at a 10.2% margin. CEO Carol Tomé said, “We entered the second half of the year with strong momentum,” and UPS raised its full-year outlook to about $91.2 billion of revenue, $8.65 billion of adjusted operating profit and $7.22 of adjusted earnings per share.
What to watch in UPS earnings
For UPS earnings, start with the U.S. business. Investors have been paying for that 8.0% adjusted margin, and one note says they’re “underwriting further domestic margin improvement in 2027,” per StreetSignal. Dumping low-priced Amazon packages helps too, the piece adds, because revenue per piece goes up. The trade-off is volume. Last quarter’s 9.3% gain in U.S. revenue per piece is the bar, and a smaller one would be an early warning.
Savings are next. By UPS’s count, the Driver Choice Program and building closures were worth about $1.2 billion in the first half, and it’s counting on roughly $3 billion for the year. But they aren’t free. The company had spent $1.8 billion on them by June and expects $1.3 billion to $1.5 billion of excluded costs for 2026. Charges that outrun savings keep GAAP profit thin. And the tax rate, near 23.0% for the year, can nudge per-share results either way.
Then there’s the cash. UPS still plans roughly $5.4 billion of dividends and $3.0 billion of capital spending this year, which leaves little slack if profit disappoints. Peak season adds one more wrinkle, since any comment on volumes, surcharges or staffing could move the stock. Shipping gifts yourself? The posted holiday shipping deadlines show what UPS, FedEx and USPS have set.
Editor’s take
A lower profit forecast isn’t automatically bad news here. UPS is shedding Amazon volume on purpose, so revenue per piece and domestic margin say more than package counts or the per-share headline. A good result? An adjusted margin near last quarter’s 9.2% with the $91.2 billion revenue outlook intact. A bad one is a cut to that outlook, or a slipping margin while charges climb, which would suggest the turnaround is costing more than planned. In short, the quality of UPS earnings counts for more than the size of any beat.
It’s also worth remembering that UPS earnings land in the same week as the big-tech and payments reports, which will say more about consumer demand. For that backdrop, see our look at the NRF holiday sales forecast. A healthy season helps every carrier, but it helps UPS most if the packages it’s keeping are the profitable ones.
