UNITED PARCEL SERVICE INC has recently released its latest 10-Q report. United Parcel Service, Inc. is a package delivery and logistics company with two reportable segments: U.S. Domestic Package and International Package. Its U.S. Domestic Package business handles time-definite delivery of letters, documents, packages and palletized freight by air and ground, while the International Package segment covers small-package operations across Europe, the Middle East and Africa, Canada and Latin America, and Asia, along with cross-border, day-definite and urgent international services. The company also provides air and ocean freight forwarding, contract logistics, customs brokerage, insurance, mail services, healthcare logistics, distribution and post-sales services.
In the first quarter of 2026, UPS said it continued to push its Customer First, People Led and Innovation Driven strategy, with a focus on healthcare, small and medium-sized businesses and international markets. The company said it was still reducing volume from its largest customer and expects that targeted reduction to be more than 50% below 2024 levels by June 2026. It also continued outsourcing a portion of Ground Saver last-mile delivery to the U.S. Postal Service and took related network capacity actions, while advancing workforce optimization efforts and its Network of the Future program.
For the three months ended March 31, 2026, revenue was $21.202 billion, down from $21.546 billion a year earlier. Operating profit fell to $1.267 billion from $1.666 billion, and operating margin narrowed to 6.0% from 7.7%. Net income declined to $864 million from $1.187 billion, while diluted earnings per share slipped to $1.02 from $1.40.
Average daily package volume in global small package operations dropped 7.7% to 19.184 million pieces from 20.789 million. UPS said the decline was driven mainly by planned volume reductions from its largest customer, revenue-quality actions affecting some e-commerce customers, and the impact of 2025 trade policy changes. Average revenue per piece rose 7.7% to $15.32 from $14.22.
Operating expenses increased to $19.935 billion from $19.880 billion. UPS pointed to transition costs and excess staffing tied to outsourcing Ground Saver to USPS, higher third-party lease expense from aircraft retirements, higher workers’ compensation expense, increased depreciation from new investments, asset impairments in digital businesses and weather-related costs. Those increases were partly offset by savings from Network Reconfiguration and Efficiency Reimagined, which reduced headcount and labor hours.
UPS said it closed 23 leased and owned buildings in the quarter, 22 of them permanently, and identified 27 additional buildings for closure in 2026. It said the Network Reconfiguration and Efficiency Reimagined programs produced about $600 million of cost savings in the first three months of 2026 and are expected to deliver about $3 billion in full-year year-over-year savings. The company said it had incurred $599 million of program costs to date, including $55 million in the first quarter, and expects $1.3 billion to $1.5 billion in non-GAAP adjusted operating expense exclusions in 2026 tied mainly to employee separation benefits and consulting fees.
UPS returned $1.4 billion to shareholders through dividends in the quarter. It also recorded $47 million in gains on sales of properties. Following these announcements, the company's shares moved 2.56%, and are now trading at a price of $100.58. Check out the company's full 10-Q submission here.
