UPS reported a challenging first quarter with declining revenues and operating margins, impacted by strategic actions and volume decreases. However, the company reaffirmed its full-year guidance and anticipates a return to growth and margin expansion in the second quarter as transformation initiatives are completed.
International Segment revenue increased 3.8%, driven by a 10.7% increase in revenue per piece.
positiveSupply Chain Solutions segment operating margin improved significantly to 8.1% on a non-GAAP adjusted basis, up from 3.6% in the prior year.
positiveCompany reaffirms full year 2026 guidance for consolidated revenue of approximately $89.7 billion and non-GAAP adjusted operating margin of approximately 9.6%.
neutralFree Cash Flow of $1,280 million for the quarter.
neutralConsolidated revenues declined 2.3% to $21.2 billion, primarily driven by an expected decline in volume.
negativeConsolidated operating margin compressed to 6.0% (GAAP) and 6.2% (Non-GAAP Adjusted) from 7.7% and 8.2% respectively in the prior year.
negativeU.S. Domestic Segment revenue declined 2.3% to $14,125 million, primarily driven by an expected decline in volume.
negativeU.S. Domestic Segment operating margin declined to 3.6% (GAAP) and 4.0% (Non-GAAP Adjusted) from 6.8% and 7.0% respectively in the prior year.
negativeSupply Chain Solutions segment revenue declined 6.5% to $2,537 million, primarily due to a decline in volume in the Mail Innovations business.
negativeGAAP Diluted EPS of $1.02, a decrease from $1.40 in the prior year.
negativeMargin expansion indicates improving profitability and operational efficiency. Measured in basis points (bps): 100 bps = 1.0%.
| Segment | Current | Prior Yr | YoY | % Total |
|---|---|---|---|---|
U.S. Domestic Package | N/A | — | — | — |
International Package | N/A | — | — | — |
Supply Chain Solutions | N/A | — | — | — |
| Total Revenue | $0.00M | — | — | 100.0% |
Segment performance shows business unit health and growth drivers.
Forward-looking guidance is subject to change and does not constitute a guarantee. Actual results may differ materially from these estimates.
| Metric | Value | Period | Specificity | vs Prior |
|---|---|---|---|---|
| revenue | approximately $89.7 billion | FY2026 | point | New |
| operating_margin | approximately 9.6% | FY2026 | point | New |
| revenue | approximately $89.7 billion | FY2026 | point | New |
| operating_margin | approximately 9.6% | FY2026 | point | New |
| revenue | flat year-over-year | FY2026 | directional | New |
| operating_margin | flat to 2025 | FY2026 | directional | New |
| revenue | up low single digits | Q2 2026 | directional | New |
| operating_margin | between 7% and 12% | Q2 2026 | wide_range | New |
| revenue | low single digits year-over-year | FY2026 | directional | New |
| operating_margin | mid-teens | FY2026 | directional | New |
| revenue | low single digit revenue growth | Q2 2026 | directional | New |
| operating_margin | between 13% and 14% | Q2 2026 | tight_range | New |
| revenue | up high single digits | FY2026 | directional | New |
| operating_margin | low double digits | FY2026 | directional | New |
| revenue | up low single digits | Q2 2026 | directional | New |
| operating_margin | between 9.5% and 10.5% | Q2 2026 | tight_range | New |
| capital_expenditures | about $3 billion | FY2026 | point | New |
| pension_contribution | $1.3 billion | FY2026 | point | New |
| free_cash_flow | approximately $5.5 billion | FY2026 | point | New |
| dividends | around $5.4 billion | FY2026 | point | New |
costout: $3 billion
$5.4 billion · 2026
Special items are non-recurring events that may distort period-over-period comparisons. Analysts typically adjust for these when calculating normalized earnings.
The first quarter of 2026 marked a critical transition period for UPS in which we needed to flawlessly execute several major strategic actions and we delivered.
With that behind us, we expect to return to consolidated revenue and operating profit growth, and adjusted operating margin expansion in the second quarter of this year.
I want to thank UPSers around the world for their hard work and efforts, and for pushing our transformation forward.
Commentary excerpts from earnings call transcripts provide management's perspective on performance, strategy, and outlook. Always review full transcripts for complete context.
Operational metrics provide insight into business drivers and customer engagement beyond traditional financial measures.