UPS Says Amazon Glide-Down Is Complete, Boosts 2026 Outlook

United Parcel Service Inc. (NYSE:UPS) stock turned lower on Tuesday after initially rising in premarket trading despite reporting second-quarter 2026 results that topped Wall Street estimates and raising its full-year guidance.

Adjusted diluted EPS of $1.76 topped the $1.66 estimate, while consolidated revenue rose approximately 7.6% year over year to $22.8 billion, beating the $21.81 billion estimate.

Carol Tomé, UPS chief executive officer, credited employees for completing the company’s planned 18-month reduction in Amazon-related volume and the associated network overhaul.

“I want to thank all UPSers for their extraordinary work over the past 18 months as we successfully completed our Amazon glide down and related network reconfiguration initiatives as designed,” Tomé said.

She said the second quarter marked a meaningful improvement in performance, with growth in consolidated revenue and adjusted operating profit, adding that the company entered the second half with solid momentum and raised its full-year guidance for revenue, adjusted operating profit and adjusted diluted EPS.

Earnings And Margins

GAAP diluted EPS fell to 71 cents from $1.51, while adjusted EPS increased from $1.55. Net income declined to $604 million from $1.28 billion, while adjusted net income rose to $1.50 billion from $1.31 billion.

GAAP operating profit fell to $930 million from $1.82 billion, with operating margin contracting to 4.1% from 8.6%.

Adjusted operating profit rose to $2.10 billion from $1.88 billion, while adjusted margin expanded to 9.2% from 8.8%.

Results included $891 million, or $1.05 per share, in after-tax transformation charges, primarily employee separation costs tied to the completed Driver Choice Program.

Segment Performance

U.S. Domestic revenue rose 6% to $14.93 billion, driven by a 9.3% increase in revenue per piece. Adjusted operating profit increased 21% to $1.19 billion, with margin improving to 8%.

Average daily volume fell to 16 million packages from 16.55 million, while adjusted cost per piece rose 8% to $13.09.

International revenue increased 12.5% to $5.04 billion, while operating profit fell to $623 million.

Supply Chain Solutions revenue rose 7.8% to $2.86 billion, with operating profit increasing to $291 million.

Cash Flow And Transformation

First-half operating cash flow reached $3.08 billion, while free cash flow totaled $1.57 billion.

UPS completed its Amazon volume glide-down and related network reconfiguration.

During the earnings conference call, UPS said the company eliminated about 2 million lower-quality Amazon packages per day.

Transformation initiatives generated about $1.2 billion in first-half benefits, with approximately $3 billion expected for 2026.

2026 Outlook

UPS raised full-year adjusted EPS guidance to $7.22, above the $7.11 estimate.

It raised revenue guidance to $91.2 billion from $89.7 billion, above the $90.29 billion estimate, and targeted adjusted operating profit of $8.65 billion.

Capital expenditures remain about $3 billion, with dividend payments of roughly $5.4 billion and a 23% tax rate expected.

UPS Price Action

UPS Stock Price Activity: United Parcel Service shares were down 5.73% at $106.47 during premarket trading on Tuesday, according to Benzinga Pro data.

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