Track market-moving stories before they get noisy

United Parcel Service (UPS -2.08%), aka UPS, may be a famous company, but it is not necessarily a top choice among dividend stocks. Sure, shares in the parcel delivery company sport a high dividend yield of 6.2%, but concerns still linger about its ability to sustain such a high payout amid a years-long downturn.

Yet while UPS's 16-year dividend growth streak has ended, there's much merit in buying this stock today, both for its yield and for the potential for further upside from its ongoing turnaround.

Image source: Getty Images.

Investors remain on the fence about UPS Over the past few years, UPS has been struggling to get over its post-pandemic hangover. While it has been getting better lately, the company has yet to hit its previous high-water mark for profitability. As seen in UPS's latest quarterly earnings, efforts such as pivoting away from low-margin Amazon orders toward higher-margin business customers are helping improve the bottom line.

But even as results beat expectations, investors reacted negatively. Again, concerns about future results and the dividend's future still linger.

Why dividend doubts are overdone With annual dividend payments totaling $6.56 per share against forecasts calling for adjusted earnings of around $7.22 per share this year, UPS has a nearly 91% forward payout ratio. That ratio is well above what's considered healthy or sustainable.

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Although UPS recently decided not to raise its payout, fears of a dividend cut remain. On the latest earnings conference call, CFO Brian Dykes reiterated plans to maintain the current payout rate. This suggests an opportunity to buy UPS today and collect its above-average yield while gaining exposure to the ongoing turnaround. Analysts remain confident in further improved results, with forecasts calling for earnings growth averaging around 7% between now and 2029.

Better yet, the stock could also rerate. UPS trades for 14.5 times forward earnings, while competitor FedEx trades for around 16 times forward earnings. If results meet current expectations and valuation converges, UPS, trading for around $105 today, could be trading north of $140 in three years' time.

Thomas Niel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and United Parcel Service. The Motley Fool recommends FedEx. The Motley Fool has a disclosure policy.

The company shook up its executive roles as part of the new model, naming the head of its U.S. business to lead its global operations, among other appointments.

Key Takeaways UPS is investing over $2B through 2028 across international, healthcare and supply chain operations. New hubs and expanded capacity should improve UPS's cross-border connectivity and network efficiency. Trade uncertainty, tariffs & geopolitical tensions could limit near-term benefits from UPS's expansion. United Parcel Service’s (UPS - Free Report) more than $2 billion investment across its International, Healthcare and Supply Chain Solutions businesses underscores its commitment to strengthening its global logistics network. The investments, planned through 2028, are expected to improve speed, reliability and visibility while helping customers navigate shifting trade routes, evolving regulations and supply chain disruptions.

The expansion of facilities and air capacity across Europe, Asia-Pacific and the Americas should enhance UPS’ ability to capture growth in high-value and time-sensitive markets, particularly in healthcare, technology, automotive and industrial manufacturing. New hubs in the Philippines and Hong Kong, along with expanded capabilities in South Korea and North America, should improve cross-border connectivity and increase network efficiency.

United Parcel’s focus on integrated air, ground, brokerage and distribution services could strengthen customer relationships by reducing handoffs and providing greater end-to-end control. Its investments in temperature-controlled facilities and cold-chain infrastructure are particularly favorable for healthcare logistics, where demand for reliable, time-sensitive transportation remains strong.

However, the company continues to operate amid an uncertain global trade environment. Changing tariffs, regulations, trade routes and geopolitical tensions could disrupt international shipping volumes and increase operating complexity. While United Parcel’s investments are aimed at making its network more resilient, prolonged macroeconomic and trade uncertainty could weigh on demand and limit the near-term benefits of its expanded capacity.

Share Price PerformanceUPS’ shares have gained 0.3% over the past three months against the Transportation - Air Freight and Cargo industry’s 9.8% decline.

Image Source: Zacks Investment Research

UPS’s Zacks RankUPS currently carries a Zacks Rank #3 (Hold).

Stocks to ConsiderInvestors interested in the Zacks Transportation sector may consider Expeditors International of Washington, Inc. (EXPD - Free Report) and Teekay Tankers Ltd (TNK - Free Report) . 

EXPD currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Expeditors has an expected earnings growth rate of 29% for 2026. The company has an encouraging earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average beat of 17.15%.

Teekay Tankers currently carries a Zacks Rank #2 (Buy).

TNK has an expected earnings growth rate of more than 100% for the current year. The company has an encouraging earnings surprise history. Its earnings topped the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average beat of 10.93%.

It has been about a month since the last earnings report for United Parcel Service (UPS - Free Report) . Shares have added about 1% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is UPS due for a pullback? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for United Parcel Service, Inc. before we dive into how investors and analysts have reacted as of late.

Earnings Beat at UPS in Q2Quarterly adjusted earnings of $1.76 per share increased 13.5% year over year. The figure beat the Zacks Consensus Estimate of $1.65 by 6.7%. Revenues rose 7.6% to $22.83 billion and surpassed the consensus estimate of $21.75 billion by 5%. Growth across all three segments supported the top line, while International revenue per piece climbed 18.9%.

UPS' Domestic Revenues Rise on Strong PricingU.S. Domestic Package revenues increased 6% year over year to $14.93 billion, driven by a 9.3% improvement in revenue per piece. Average daily package volume declined to 16 million from 16.6 million a year earlier, indicating that pricing more than offset lower shipment activity.

Adjusted operating profit advanced 21% year over year to $1.19 billion. The adjusted operating margin expanded 100 basis points to 8%, even as adjusted cost per piece increased 8% to $13.09. The margin improvement reflects progress from UPS’ network reconfiguration and efficiency initiatives.

United Parcel Service’s International Sales JumpInternational Package revenues increased 12.5% year over year to $5.04 billion. The segment delivered the strongest revenue growth among UPS’ operating businesses, aided by the sharp increase in revenue per piece.

Adjusted operating profit declined 8.7% year over year to $623 million. The adjusted operating margin contracted to 12.4% from 15.2% in the prior-year quarter, showing that higher revenue did not translate into operating profit growth as segment expenses increased.

UPS Supply Chain Business Delivers Profit GrowthSupply Chain Solutions revenues rose 7.8% year over year to $2.86 billion. The improvement was primarily driven by growth in forwarding and logistics operations, including the healthcare business.

Adjusted operating profit increased 37.3% year over year to $291 million. The adjusted operating margin expanded 220 basis points to 10.2%, reflecting stronger operating leverage and making Supply Chain Solutions the company’s most improved segment on a profitability basis.

United Parcel Service Expands Adjusted MarginConsolidated adjusted operating profit rose 12% year over year to $2.10 billion. The adjusted operating margin increased to 9.2% from 8.8%, supported by profit growth in the U.S. Domestic Package and Supply Chain Solutions businesses.

On a GAAP basis, operating profit fell to $930 million from $1.82 billion, while diluted earnings declined to 71 cents per share from $1.51. Results included $1.17 billion of pretax transformation strategy costs, primarily related to employee separation expenses associated with the Driver Choice Program.

UPS Network Changes Produce Cost BenefitsUPS generated approximately $1.2 billion of benefits from its network reconfiguration and Efficiency Reimagined initiatives during the first six months of 2026. Management expects these programs to deliver approximately $3 billion of benefits for the full year.

The company completed its planned Amazon volume reduction and related network changes during the period. UPS has reduced its operational workforce and closed daily operations at certain facilities as it aligns network capacity with its changing shipment mix. The broader initiatives are expected to conclude by 2027.

United Parcel Service’s Free Cash Flow More Than DoublesCash provided by operating activities increased to $3.08 billion in the first six months of 2026 from $2.67 billion a year earlier. Capital expenditures declined to $1.72 billion from $2 billion.

Free cash flow more than doubled to $1.57 billion from $742 million. The improvement gives UPS greater flexibility to fund network investments, meet financial obligations and return capital to shareholders.

UPS’ 2026 Outlook RaisedManagement raised its full-year consolidated revenue outlook to approximately $91.2 billion from the prior view of $89.7 billion. UPS also lifted its adjusted operating profit target to approximately $8.65 billion and adjusted earnings guidance to approximately $7.22 per share.

Capital expenditures are still projected at roughly $3 billion. Dividend payments are expected to total around $5.4 billion, subject to board approval, while the effective tax rate is projected to be approximately 23%.

How Have Estimates Been Moving Since Then?It turns out, estimates revision have trended downward during the past month.

The consensus estimate has shifted -6.4% due to these changes.

VGM ScoresCurrently, UPS has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for value investors.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, UPS has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

UPS plans to invest a total of more than $2 billion into its international, healthcare and supply chain businesses between 2024 and 2028, an executive told CNBC in a report published Monday (Aug. 24).

ATLANTA--(BUSINESS WIRE)---- $UPS #upsnews--UPS (NYSE: UPS), the global leader in complex, premium logistics, announced ongoing investments of more than $2 billion across its International, Healthcare and Supply Chain Solutions businesses. The investments, which began in 2024 and will continue through 2028, help businesses move faster and navigate shifting trade routes, evolving regulations and supply chain uncertainty with greater flexibility and connectivity across key global markets. Projects underway include.

UPS (UPS -0.56%) consistently appears in value-stock investors' filters. After all, who doesn't like the sound of a blue chip stock yielding 6.4% and trading at just 14.3 times 2026 earnings expectations? In addition, there's an attractive strategic transformation underway that supports long-term margin improvement as management repurposes its network for higher-margin deliveries in targeted end markets. It's a compelling mix, but there are some concerns that investors need to address before buying the stock.

UPS strategy The company is transforming away from chasing volume growth and toward higher-margin end markets such as small- and medium-sized businesses (SMBs), healthcare, and business-to-business (B2B) e-commerce deliveries. This involves the so-called Amazon.com (AMZN -0.57%) "glide down," whereby UPS reduced its Amazon delivery volume by 50% from the start of 2025 to the middle of 2026.

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At the same time, it's investing in technology, notably automation and smart facilities, to improve productivity and operate a leaner, more profitable network. Everything points to a long-term future with higher margins, and the bullish case for the stock sees UPS emerging from the glide-down in 2026 (after incurring upfront, temporary costs associated with reducing its labor force by 78,000 and closing 150 buildings) into a higher-margin future.

Unfortunately, there are a few problems with it.

UPS quality of earnings First, UPS appears to be generating revenue from fuel surcharges charged to customers, which is likely to prove unsustainable over time. To be fair, there may be other costs associated with higher fuel prices, but here's a look at the reported increase in fuel surcharges relative to fuel expenses.

UPS

2024

2025

First Half 2026

Fuel surcharge change

Down $280 million

Up $282 million*

Up $1,173 million

Fuel expense change

Down $409 million

Down $50 million

Up $774 million

Net benefit

$129 million

$332 million

$429 million

Data source: UPS presentations. *UPS only reported the increase in U.S. Domestic package fuel surcharges.

This is not a high-quality way to generate earnings.

The dividend is constraining investment Investments in productivity are working well for UPS, with CEO Carol Tome disclosing that "68.5% of the volume in our U.S. business was flowing through an automated building compared to 64% one year ago," and "the cost per piece in an automated building is about 28% lower than a non-automated building."

But here's the thing. UPS could theoretically invest more in its network and, arguably, be more aggressive in acquisitions to develop healthcare or SMB volumes if it didn't use so much of its free cash flow (FCF) paying out roughly $5.4 billion in dividends. Management expects $5.5 billion in FCF, but according to the Wall Street analyst consensus from Visible Alpha, this figure will include $291 million from property disposals related to the building closures. Without this unsustainable cash-flow source, UPS's FCF will not cover its dividend, and the dividend is arguably holding back capital spending.

Image source: Getty Images.

Amazon's launch of its supply chain services business is a genuine threat to UPS. The company has spent years building its supply chain network to support its own growth, but is now extending that expertise to offer supply chain services to customers beyond its marketplace sellers.

In addition, Amazon can sell more services to marketplace sellers who previously used only Amazon's services for activities related to Amazon's marketplace. This is a formidable threat to UPS and FedEx and needs to be taken seriously.

While UPS and FedEx have the business moat of a highly tuned, efficient network, the reality is that Amazon's entry could significantly constrain their ability to raise prices. Moreover, the strength of Amazon's relationships with SMBs could directly challenge UPS in a core growth market.

Image source: Getty Images.

A value stock to buy? UPS is doing a lot of the right things, but cautious long-term investors may want to see how the company emerges from the Amazon "glide down" over the next few quarters before buying in. If successful, UPS investors can expect margin expansion in 2027, but it needs to improve the quality of its earnings and cash flow and demonstrate resilience to the Amazon threat before investors feel fully confident buying in.

UPS (UPS -0.56%) spent 18 months deliberately shrinking its relationship with its biggest customer, and on July 28 it declared the job finished. In the earnings release, CEO Carol Tomé thanked employees for having "successfully completed our Amazon glide down and related network reconfiguration initiatives as designed."

The scale of what ended is massive. On the earnings call, Tomé said UPS had eliminated about 2 million pieces per day of what she called lower-quality Amazon (AMZN -0.57%) volume, removing roughly $4.5 billion of related expenses along the way.

For Amazon shareholders, the story runs the other way. Two million packages a day stopped moving through UPS trucks. Who's moving them now, and at what cost?

Image source: Amazon.

UPS got what it wantedThe carrier's results say a lot about the volume it gave up. UPS's second-quarter U.S. domestic revenue rose 6% year over year on a 9.3% increase in revenue per piece -- more money on fewer packages. The segment's non-GAAP (adjusted) operating margin expanded to 8%, up a full percentage point from a year earlier. And the company raised its full-year revenue outlook to about $91.2 billion.

And Tomé told analysts that excluding Amazon and the volume UPS intentionally handed to the market, its volume grew in the second quarter.

Put another way, the packages UPS shed were the ones diluting its profitability. Residential e-commerce delivery is expensive relative to what shippers pay, and UPS's margin went up as less of it flowed through the network.

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The biggest parcel carrier is the shipperMost of that volume appears to have gone to Amazon itself. According to logistics data firm ShipMatrix, Amazon's delivery arm handled an estimated 6.7 billion U.S. parcels in 2025. The U.S. Postal Service handled 6.6 billion, UPS came in at 4.4 billion, and FedEx delivered 3.6 billion. That made Amazon the country's largest parcel carrier by volume.

The growth rates were just as lopsided. Amazon's volumes rose nearly 10% in 2025, while UPS and the Postal Service each shrank 8.6%, ShipMatrix found. FedEx was the only one of the three traditional carriers whose volume grew.

To be fair, Amazon hasn't said precisely how much of the departed UPS volume it absorbed itself. The company still hands packages to the Postal Service and other carriers for portions of the last mile, so some of the load simply moved between carriers.

But Amazon's own delivery network is already expanding fast. The company is spending more than $4 billion to triple its rural delivery footprint by the end of this year, growing that network to over 200 delivery stations reaching more than 13,000 ZIP codes -- capacity it says will handle over a billion additional packages a year. The rural build is one slice of the capital expenditures Amazon keeps pouring into its delivery network.

The contrast with the carriers is sharp. FedEx and UPS charged remote-delivery surcharges of about $15.50 and $15.35 per package last year, and Amazon is building density in the kinds of places its rivals charge extra to visit.

A $27.9 billion quarterly shipping billThat capacity isn't free, and Amazon's income statement shows where the cost lands. The company's worldwide shipping costs hit $27.9 billion in the second quarter, up 19% from $23.4 billion a year earlier. Across the first six months of 2026, shipping costs rose 17% to $53.6 billion, so the bill is growing faster as the year goes on.

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Compare that to what the shipping supports. Amazon's online-store sales grew 15% year over year in the second quarter, so the delivery bill is outpacing the revenue it serves.

Why carry the load anyway? Because for Amazon, delivery is part of the product. The company's own filings credit its sales growth partly to its "fast shipping offers," and speed is easier to guarantee on a network Amazon controls than on one it rents.

That, I think, is the right way to read the 2 million daily packages. Volume that was a margin problem for a carrier is, for Amazon, the cost of owning its promise to customers.

The trade-off is right there in the numbers: shipping costs rising 19% against 15% online-store growth. UPS is done with the volume. The cost of carrying it sits on Amazon's own network now, and it likely will for a long time.

UPS (UPS -0.29%), one of the world's largest shipping couriers, significantly reduced its dependence on Amazon (AMZN -1.83%) over the past two years. In early 2025, UPS announced it would reduce its Amazon-related shipping volume by more than 50% through 2026. By mid-2026, UPS had phased out its standard last-mile delivery services for Amazon across its major markets, reducing its shipment volume by millions of pieces per day.

Amazon had been UPS's largest customer, so it might initially seem like an odd move to eliminate those services. However, those last-mile shipments clogged its sorting facilities and generated lower profits than its longer-range deliveries. Therefore, UPS was willing to sacrifice its near-term revenue to stabilize its long-term margins. Let's see if that was the right call.

Image source: UPS.

How much did UPS depend on Amazon? In 2024 and 2025, UPS generated about 11% of its revenue from Amazon. That percentage dipped below 9% in the first half of 2026 and should shrink even further in the second half.

That percentage won't drop to zero, since UPS will still process Amazon's returns at its UPS Stores, handle its marketplace seller logistics, and deliver its long-distance freight. It will also still fulfill Amazon's last-mile orders in certain rural areas and during peak delivery seasons. Therefore, it's not completely cutting ties with Amazon, as FedEx (FDX -0.32%) did in 2019.

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What will the impact be on its business? UPS is focused on securing higher-margin orders from small- to medium-sized businesses and healthcare customers to offset its loss of Amazon's orders. It's also trimming its workforce, closing some facilities, and automating more tasks to streamline its business.

For 2026, UPS expects its revenue to rise 3% to $91.2 billion as its adjusted EPS grows 1% to $7.22. Those growth rates might seem sluggish, but they would mark the first time its revenue and adjusted EPS have grown in tandem since 2022.

More importantly, achieving that acceleration would also prove that UPS doesn't need Amazon's lower-margin orders to keep growing. It also counters the bearish notion that macro, competitive, and labor-related headwinds would limit its long-term growth.

Is UPS a good investment today? At $100, UPS still looks like a bargain at 14 times this year's earnings, and it pays an attractive forward dividend yield of 6.4%. It's raised that payout for 16 consecutive years. UPS isn't an exciting stock, but its low valuation, high yield, and steady turnaround all make it a safe income play in this tumultuous market.

A package crossing into the United States used to depend on a person to review it, classify and catch any errors, slowing the process with days-long delays at the border. Sorting more packages faster is a warehouse problem.

E. Ohman J or Asset Management AB lessened its stake in shares of United Parcel Service, Inc. (NYSE: UPS) by 22.7% in the second quarter, according to its most recent filing with the Securities and Exchange Commission. The institutional investor owned 19,426 shares of the transportation company's stock after selling 5,700 shares during

ATLANTA--(BUSINESS WIRE)---- $ups #dividend--UPS (NYSE: UPS) today announced its regular quarterly dividend of $1.64 per share on all outstanding Class A and Class B shares. The dividend is payable September 3, 2026, to shareowners of record on August 17, 2026. Commitment to the dividend is one of UPS's core principles and a hallmark of the company's financial strength. UPS has either maintained or increased its dividend each year since going public in 1999. About UPS UPS (NYSE: UPS) is one of the world's largest.

Posted by Defense World Staff on Aug 3rd, 2026

First National Bank of Mount Dora Trust Investment Services cut its holdings in shares of United Parcel Service, Inc. (NYSE:UPS – Free Report) by 41.9% in the 1st quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission. The firm owned 37,591 shares of the transportation company’s stock after selling 27,058 shares during the period. First National Bank of Mount Dora Trust Investment Services’ holdings in United Parcel Service were worth $3,698,000 at the end of the most recent reporting period.

A number of other institutional investors and hedge funds have also added to or reduced their stakes in UPS. University of Texas Texas AM Investment Management Co. bought a new stake in United Parcel Service during the 4th quarter valued at $25,000. IFC & Insurance Marketing Inc. bought a new position in shares of United Parcel Service in the fourth quarter worth $25,000. Coston McIsaac & Partners increased its holdings in shares of United Parcel Service by 77.8% during the fourth quarter. Coston McIsaac & Partners now owns 272 shares of the transportation company’s stock valued at $27,000 after purchasing an additional 119 shares during the period. Torren Management LLC acquired a new position in shares of United Parcel Service during the fourth quarter valued at $29,000. Finally, Kemnay Advisory Services Inc. bought a new stake in shares of United Parcel Service during the fourth quarter valued at about $29,000. 60.26% of the stock is owned by institutional investors.

United Parcel Service Stock Up 0.0% UPS stock opened at $104.25 on Monday. United Parcel Service, Inc. has a 12 month low of $82.00 and a 12 month high of $122.41. The firm has a market cap of $88.62 billion, a PE ratio of 19.38, a P/E/G ratio of 1.88 and a beta of 1.06. The firm has a 50 day simple moving average of $109.12 and a 200 day simple moving average of $106.65. The company has a debt-to-equity ratio of 1.58, a current ratio of 1.18 and a quick ratio of 1.21.

United Parcel Service (NYSE:UPS – Get Free Report) last posted its quarterly earnings results on Tuesday, July 28th. The transportation company reported $1.76 earnings per share (EPS) for the quarter, topping the consensus estimate of $1.65 by $0.11. The firm had revenue of $22.83 billion for the quarter, compared to analyst estimates of $21.86 billion. United Parcel Service had a net margin of 5.08% and a return on equity of 37.50%. The firm’s quarterly revenue was up 7.6% compared to the same quarter last year. During the same quarter in the previous year, the business posted $1.55 earnings per share. United Parcel Service has set its FY 2026 guidance at 7.220-7.220 EPS. Equities research analysts forecast that United Parcel Service, Inc. will post 7.21 earnings per share for the current fiscal year.

United Parcel Service Announces Dividend The business also recently announced a quarterly dividend, which was paid on Thursday, June 4th. Stockholders of record on Monday, May 18th were given a dividend of $1.64 per share. The ex-dividend date of this dividend was Monday, May 18th. This represents a $6.56 dividend on an annualized basis and a dividend yield of 6.3%. United Parcel Service’s payout ratio is 121.93%.

Wall Street Analysts Forecast Growth A number of brokerages recently issued reports on UPS. BMO Capital Markets increased their target price on shares of United Parcel Service from $110.00 to $115.00 and gave the company a “market perform” rating in a research report on Wednesday, July 29th. Stifel Nicolaus upped their price target on shares of United Parcel Service from $114.00 to $115.00 and gave the stock a “buy” rating in a research note on Wednesday, July 29th. UBS Group increased their price objective on shares of United Parcel Service from $123.00 to $124.00 and gave the company a “buy” rating in a report on Wednesday, July 29th. Stephens dropped their target price on United Parcel Service from $135.00 to $130.00 and set an “overweight” rating on the stock in a report on Wednesday, July 29th. Finally, Wall Street Zen downgraded United Parcel Service from a “buy” rating to a “hold” rating in a research report on Sunday, July 26th. One equities research analyst has rated the stock with a Strong Buy rating, eight have assigned a Buy rating, eleven have given a Hold rating and one has issued a Sell rating to the company’s stock. Based on data from MarketBeat.com, United Parcel Service currently has an average rating of “Hold” and an average target price of $117.41.

Read Our Latest Report on United Parcel Service

Key United Parcel Service News Here are the key news stories impacting United Parcel Service this week:

Positive Sentiment: Strong quarterly results and higher outlook: UPS reported second-quarter earnings of $1.76 per share, above the $1.65 consensus estimate, while revenue reached $22.83 billion versus expectations of $21.86 billion. Revenue increased 7.6% year over year, and the company raised its full-year outlook. UPS posts strong Q2 2026 results, raises full-year outlook Positive Sentiment: Improving business mix: UPS said the China-to-U.S. trade lane has returned to growth, its 18-month reduction in Amazon volumes is complete, and higher-margin freight is gaining traction. These developments could support margins and reduce uncertainty around the company’s business restructuring. UPS Says China-to-US Trade Lane Has Returned to Growth Positive Sentiment: Analyst price-target support: BMO Capital Markets raised its UPS target to $115, while Susquehanna increased its target to $120. Stifel, UBS and Oppenheimer also issued forecasts indicating potential appreciation. BMO raises UPS price target Stifel forecast Positive Sentiment: Small-business growth initiative: New digital tools for pickup management, label creation and mobile shipping could help UPS attract small-business customers and gain market share over time. UPS digital tools for small businesses Neutral Sentiment: Analyst views remain divided: While several firms see upside, Stephens issued a pessimistic forecast, highlighting uncertainty around the pace of the recovery. Stephens pessimistic forecast Negative Sentiment: Dividend and cash-flow concerns: A recent comparison with FedEx noted that UPS’s dividend consumed nearly all of its adjusted free cash flow last year, raising concerns about dividend sustainability and financial flexibility. UPS versus FedEx dividend analysis United Parcel Service Profile (Free Report)

United Parcel Service (NYSE: UPS) is a global package delivery and supply chain management company that provides a broad range of transportation, logistics and e-commerce services. Its core business centers on small-package delivery and last-mile distribution for business and individual customers, supported by a network of ground transportation, air cargo operations (UPS Airlines) and sorting facilities. In addition to parcel delivery, UPS offers freight transportation, contract logistics, warehousing, customs brokerage and reverse-logistics solutions designed to support domestic and international commerce.

The company traces its roots to 1907 when it began as a small messenger service in the United States and later evolved into the United Parcel Service.

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Posted by Defense World Staff on Aug 1st, 2026

Arkadios Wealth Advisors raised its holdings in United Parcel Service, Inc. (NYSE:UPS – Free Report) by 49.5% during the first quarter, according to the company in its most recent 13F filing with the SEC. The fund owned 45,843 shares of the transportation company’s stock after buying an additional 15,179 shares during the quarter. Arkadios Wealth Advisors’ holdings in United Parcel Service were worth $4,510,000 at the end of the most recent quarter.

Several other hedge funds and other institutional investors also recently modified their holdings of UPS. Vanguard Group Inc. boosted its position in United Parcel Service by 1.8% during the 4th quarter. Vanguard Group Inc. now owns 68,496,420 shares of the transportation company’s stock valued at $6,794,160,000 after acquiring an additional 1,218,432 shares in the last quarter. State Street Corp raised its position in shares of United Parcel Service by 3.3% in the 4th quarter. State Street Corp now owns 32,092,627 shares of the transportation company’s stock worth $3,183,268,000 after acquiring an additional 1,029,377 shares in the last quarter. Charles Schwab Investment Management Inc. lifted its stake in shares of United Parcel Service by 3.3% in the 4th quarter. Charles Schwab Investment Management Inc. now owns 27,142,759 shares of the transportation company’s stock valued at $2,692,290,000 after purchasing an additional 856,125 shares during the period. Geode Capital Management LLC lifted its stake in shares of United Parcel Service by 1.4% in the 4th quarter. Geode Capital Management LLC now owns 17,154,091 shares of the transportation company’s stock valued at $1,703,291,000 after purchasing an additional 240,253 shares during the period. Finally, Victory Capital Management Inc. boosted its position in shares of United Parcel Service by 72.9% during the fourth quarter. Victory Capital Management Inc. now owns 13,818,314 shares of the transportation company’s stock valued at $1,370,639,000 after purchasing an additional 5,826,824 shares in the last quarter. Hedge funds and other institutional investors own 60.26% of the company’s stock.

Key Headlines Impacting United Parcel Service Here are the key news stories impacting United Parcel Service this week:

Positive Sentiment: Strong quarterly results and higher outlook: UPS reported second-quarter earnings of $1.76 per share, above the $1.65 consensus estimate, while revenue reached $22.83 billion versus expectations of $21.86 billion. Revenue increased 7.6% year over year, and the company raised its full-year outlook. UPS posts strong Q2 2026 results, raises full-year outlook Positive Sentiment: Improving business mix: UPS said the China-to-U.S. trade lane has returned to growth, its 18-month reduction in Amazon volumes is complete, and higher-margin freight is gaining traction. These developments could support margins and reduce uncertainty around the company’s business restructuring. UPS Says China-to-US Trade Lane Has Returned to Growth Positive Sentiment: Analyst price-target support: BMO Capital Markets raised its UPS target to $115, while Susquehanna increased its target to $120. Stifel, UBS and Oppenheimer also issued forecasts indicating potential appreciation. BMO raises UPS price target Stifel forecast Positive Sentiment: Small-business growth initiative: New digital tools for pickup management, label creation and mobile shipping could help UPS attract small-business customers and gain market share over time. UPS digital tools for small businesses Neutral Sentiment: Analyst views remain divided: While several firms see upside, Stephens issued a pessimistic forecast, highlighting uncertainty around the pace of the recovery. Stephens pessimistic forecast Negative Sentiment: Dividend and cash-flow concerns: A recent comparison with FedEx noted that UPS’s dividend consumed nearly all of its adjusted free cash flow last year, raising concerns about dividend sustainability and financial flexibility. UPS versus FedEx dividend analysis Wall Street Analyst Weigh In UPS has been the topic of several recent research reports. Stifel Nicolaus upped their price target on United Parcel Service from $114.00 to $115.00 and gave the stock a “buy” rating in a research note on Wednesday. Stephens lowered their price objective on United Parcel Service from $135.00 to $130.00 and set an “overweight” rating for the company in a research report on Wednesday. Oppenheimer boosted their target price on shares of United Parcel Service from $115.00 to $117.00 and gave the company an “outperform” rating in a report on Wednesday. Weiss Ratings raised shares of United Parcel Service from a “sell (d+)” rating to a “hold (c-)” rating in a research report on Friday, July 10th. Finally, Citizens Jmp assumed coverage on shares of United Parcel Service in a research note on Wednesday, July 15th. They issued a “market perform” rating for the company. One research analyst has rated the stock with a Strong Buy rating, eight have given a Buy rating, eleven have given a Hold rating and one has issued a Sell rating to the company. According to MarketBeat.com, the company has an average rating of “Hold” and an average price target of $117.41.

Read Our Latest Analysis on United Parcel Service

United Parcel Service Stock Performance Shares of NYSE UPS opened at $104.25 on Friday. The company has a current ratio of 1.18, a quick ratio of 1.21 and a debt-to-equity ratio of 1.58. United Parcel Service, Inc. has a 12-month low of $82.00 and a 12-month high of $122.41. The firm has a market capitalization of $88.62 billion, a price-to-earnings ratio of 19.38, a price-to-earnings-growth ratio of 1.90 and a beta of 1.05. The firm has a 50 day moving average of $109.12 and a 200 day moving average of $106.66.

United Parcel Service (NYSE:UPS – Get Free Report) last released its earnings results on Tuesday, July 28th. The transportation company reported $1.76 earnings per share (EPS) for the quarter, topping the consensus estimate of $1.65 by $0.11. United Parcel Service had a net margin of 5.08% and a return on equity of 37.50%. The company had revenue of $22.83 billion during the quarter, compared to analyst estimates of $21.86 billion. During the same period in the prior year, the firm posted $1.55 EPS. The firm’s quarterly revenue was up 7.6% compared to the same quarter last year. United Parcel Service has set its FY 2026 guidance at 7.220-7.220 EPS. On average, research analysts anticipate that United Parcel Service, Inc. will post 7.21 earnings per share for the current year.

United Parcel Service Announces Dividend The business also recently announced a quarterly dividend, which was paid on Thursday, June 4th. Investors of record on Monday, May 18th were paid a dividend of $1.64 per share. This represents a $6.56 annualized dividend and a yield of 6.3%. The ex-dividend date of this dividend was Monday, May 18th. United Parcel Service’s dividend payout ratio (DPR) is presently 121.93%.

About United Parcel Service (Free Report)

United Parcel Service (NYSE: UPS) is a global package delivery and supply chain management company that provides a broad range of transportation, logistics and e-commerce services. Its core business centers on small-package delivery and last-mile distribution for business and individual customers, supported by a network of ground transportation, air cargo operations (UPS Airlines) and sorting facilities. In addition to parcel delivery, UPS offers freight transportation, contract logistics, warehousing, customs brokerage and reverse-logistics solutions designed to support domestic and international commerce.

The company traces its roots to 1907 when it began as a small messenger service in the United States and later evolved into the United Parcel Service.

See Also Five stocks we like better than United Parcel Service Chevron’s Strong Quarter Shows Why It Still Leads the Energy Sector Amazon’s Earnings Beat Shows Why AWS Is Back at the Center of the Bull Case Apple’s Record Quarter Could Not Outrun Its Guidance Problem McKesson’s Compounding Keeps Adding Up Want to see what other hedge funds are holding UPS? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for United Parcel Service, Inc. (NYSE:UPS – Free Report).

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« PREVIOUS HEADLINEMerck & Co., Inc. $MRK Shares Bought by Argent Capital Management LLC

The yield gap starts with a cash claim. Last year, UPS’s dividend consumed nearly all of its adjusted free cash flow.

United Parcel Service (NYSE:UPS) has finished shrinking its Amazon business. Now it has to show what the rebuilt network can earn in cash.

Second-quarter revenue rose 7.6% to $22.8 billion. Adjusted operating profit increased 12% to $2.1 billion, and adjusted operating margin widened to 9.2% from 8.8%. UPS raised its 2026 targets to about $91.2 billion of revenue, $8.65 billion of adjusted operating profit and $7.22 of adjusted EPS.

At Wednesday’s close, UPS’s $6.56 annualized dividend yielded about 6.3%, against roughly 1.6% on FedEx’s new $4.88 rate. The question is not which carrier pays more. It is how much cash each carrier has left after paying it.

UPS Improved The Margin. Cash Still Has To Catch UpThe Q2 repair is visible in the domestic business. Revenue rose 6% even as average daily package volume fell 3.3%, because revenue per piece increased 9.3%. Domestic adjusted operating margin improved to 8% from 7%. Yet first-half adjusted operating profit fell to $3.42 billion.

UPS reported $1.2 billion of program benefits through June toward a $3 billion full-year goal. Those are not net cash savings. First-half transformation costs totaled $1.23 billion, and full-year excluded costs are guided to $1.3 billion–$1.5 billion.

The cash turn lags.

UPS generated $1.57 billion of free cash flow in the first half, up from $742 million a year earlier. The company still expects about $3 billion of capital spending and around $5.4 billion of dividend payments this year.

Seasonality favors second-half cash generation, but the comparison is demanding. In 2025, adjusted free cash flow was $5.47 billion against $5.4 billion of dividends. On that measure, the dividend absorbed roughly 99 cents of every dollar, leaving almost nothing for repurchases or debt reduction. The income statement has improved; cash must confirm the repair.

FedEx’s $13.3 Billion Cash Balance Needs A HaircutFedEx carried much wider historical coverage into its separation. Fiscal 2026 adjusted free cash flow was $4.68 billion, up from $3.90 billion, while dividend payments totaled approximately $1.4 billion, or about 30% of that issuer-adjusted cash measure.

That figure predates the separation, which limits how directly it applies going forward. The current $1.22 quarterly dividend, the $4.88 annualized figure used above, applies only to the company left after Freight departed. A trailing twelve-month total would still mix in pre-reset payments and show a higher yield on public trackers; the forward rate is cleaner.

The headline cash balance overstates ordinary flexibility. Of the $13.3 billion at year-end, about $4.1 billion came from a pre-spin FedEx Freight dividend funded largely with debt, tied, FedEx said, to preserving the spin-off’s tax-free treatment before it went toward debt tender offers. Another $800 million is tariff refunds held for customers — money that was never dividend capacity to begin with.

That leaves about $8.4 billion, still substantial and a cleaner base for judging cash available to the continuing company. FedEx also cut capital spending to $3.8 billion, 4% of revenue and the lowest annual ratio in company history — a smaller dividend claim and lower capital intensity than UPS carried last year.

The Next Clean Test Starts After FreightUPS’s hurdle is measurable. Full-year free cash flow must cover about $5.4 billion of dividends, with enough left to restore real capital-allocation choice. A repeat of 2025 would cover the payout and little else.

FedEx’s hurdle is different. The denominator has changed. It has guided to $3.9 billion of calendar-2026 capital spending but has not produced a full-year free-cash-flow figure for the post-spin business. Comparing that future company against the old $1.4 billion dividend bill would mix two corporate perimeters.

FedEx’s first clean continuing-operations result will show how much of its historical coverage survived the separation. Until then, its lower yield reflects a wider demonstrated buffer, tempered by an incomplete post-spin record.

UPS offers more income after a year in which its dividend used nearly all adjusted free cash flow. FedEx offers less after a year in which the payout used about 30%, with Freight still inside the numbers. That is the yield gap. The ranking holds today — post-spin cash generation could confirm it or reverse it.

Source: UPS second-quarter 2026 earnings release (July 28, 2026), fourth-quarter 2025 earnings release and 2025 Form 10-K; FedEx fourth-quarter and full-year fiscal 2026 earnings release and Q4 investor roadshow (June 23, 2026), historical dividend record and FedEx Freight separation disclosures. Market prices as of the July 29, 2026 close.

The author holds no position in any security mentioned. Structural research, not personalized investment advice.

For further research, read the weekly structural income letter at jungmoku.substack.com.

Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.

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© 2026 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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Key Takeaways UPS removed 2 million daily Amazon pieces and about $4.5 billion in related expenses.UPS raised 2026 revenue guidance to about $91.2 billion and adjusted EPS guidance to $7.22.U.S. Domestic adjusted profit rose 21% as pricing, mix and productivity lifted margin to 8%. United Parcel Service, Inc. (UPS - Free Report) framed its second-quarter 2026 earnings call around the completion of its Amazon volume reduction and the emergence of a leaner U.S. network.

Management also raised its full-year outlook, arguing that improved pricing, automation and a richer customer mix should support margin expansion through the second half.

UPS Completes Amazon Glide-DownChief executive officer Carol Tomé said UPS completed its 18-month Amazon glide-down and related network reconfiguration as designed. The company removed roughly 2 million lower-quality pieces per day and about $4.5 billion of associated expenses.

Chief financial officer Brian Dykes said the restructuring included nearly 30,000 fewer operational positions during the first half and 45 building closures, with additional closures planned later in 2026.

Management still expects approximately $3 billion of benefits from network reconfiguration and efficiency programs this year. UPS presented the completed reset as a foundation for operating leverage rather than an endpoint.

UPS Raises Its 2026 OutlookUPS increased its full-year consolidated revenue outlook to approximately $91.2 billion and adjusted operating profit target to about $8.65 billion. Adjusted earnings guidance rose to approximately $7.22.

Dykes said the outlook assumes U.S. Domestic revenues of approximately $60 billion and a full-year operating margin near 7.5%. Management expects the segment’s second-half margin to reach approximately 8.8%.

Capital expenditures remain projected at about $3 billion, while free cash flow is expected to reach approximately $5.5 billion. UPS also plans roughly $5.4 billion of dividend payments, subject to board approval.

UPS Domestic Margin Leverage Takes ShapeU.S. Domestic revenues increased 6% to $14.9 billion, while adjusted operating profit rose 21% to $1.19 billion. The adjusted operating margin expanded 100 basis points to 8%.

Dykes attributed the improvement to pricing, mix and productivity. Revenue per piece increased 9.3%, exceeding adjusted cost-per-piece growth by 130 basis points.

UPS reported adjusted earnings of $1.76 per share, above the Zacks Consensus Estimate of $1.65. Revenues of $22.83 billion also exceeded the $21.75 billion consensus estimate.

UPS Expands Premium Growth PrioritiesTomé said the next phase centers on small and midsize businesses, healthcare and business-to-business shipments. SMB average daily volume grew 4.3%, lifting its share of U.S. volume by 250 basis points to 34.5%.

Digital Access Program revenues reached $1.4 billion, while B2B volume through the platform increased 34%. Healthcare revenues exceeded $3 billion for the second consecutive quarter.

Management also emphasized RFID and artificial intelligence. Tomé said RFID has been deployed across U.S. delivery facilities and package cars, providing data that UPS can use to improve planning, routing and package visibility.

UPS Manages International Mix and Fuel PressureInternational revenue rose 12.5% to $5.04 billion, although adjusted operating profit declined 8.7% to $623 million. The segment’s operating margin fell to 12.4% from 15.2%.

Dykes said fuel created a larger margin effect internationally because air transportation represents a greater share of the cost structure. Middle East disruptions also required additional aircraft hours and network rerouting.

Management expects International revenues to grow at a mid-single-digit rate for 2026, with a mid-teens operating margin. Improving Asia trade lanes and easier comparisons tied to de minimis changes underpin the second-half view.

UPS Q&A Tests the Reset’s DurabilityA Goldman Sachs analyst asked whether the domestic margin improvement was structural. Dykes said UPS expects revenue per piece to exceed cost per piece by 50 to 100 basis points, supporting further margin expansion.

A UBS analyst pressed management on 2027 pricing and mix. Dykes said base pricing plus 50 to 100 basis points of product-mix benefit was a reasonable framework, while Amazon comparisons will continue affecting the first half of 2027.

A Bernstein analyst asked about Amazon’s competitive ambitions. Tomé said UPS had not identified volume lost to Amazon and stressed the company’s advantages in complex health care, RFID visibility, service and customer relationships.

UPS Keeps Focus on Profitable GrowthManagement’s tone was confident but disciplined. UPS expects second-half improvement from a structurally smaller network, stronger pricing and premium-volume growth rather than a broad recovery in package demand.

The company’s priorities remain revenue quality, automation, healthcare logistics and consistent margin expansion, while fuel volatility, tariffs and geopolitical disruptions remain operating considerations.

Zacks Signals for UPSUPS currently carries a Zacks Rank #3 (Hold). The Value Score of B, Momentum Score of A and VGM Score of B indicate favorable characteristics in those styles, while the Growth Score of C is comparatively neutral.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Style Scores are designed to complement the Zacks Rank, with A and B representing stronger grades. The current ranking calls for a balanced stance, and the Zacks Rank can change as earnings estimates are revised following the latest results.

UPS remains a hold as restructuring and cost-cutting have yet to restore historical margins, despite Q2 top- and bottom-line beats. Q2 saw revenue of $22.8B and adjusted EPS of $1.76, but incremental revenue is not translating into meaningful profit growth. Shedding the Amazon contract and Driver Choice Program are positives, yet cost per piece inflation and weak margin leverage persist.

You need money to make money. But if you focus on high-yielding dividend stocks, you don't need as much to generate a lot of recurring cash flow. While some high-yielding stocks can be risky, others are safer than they look.

Three dividend stocks with payouts exceeding 5% that can be excellent options for income-seeking investors today are Verizon Communications (VZ +1.84%), United Parcel Service (UPS -6.18%), and General Mills (GIS +2.84%). Here's how by investing $6,000 into each one of these stocks, investors could generate $1,100 in dividend income, and why doing so may not be as risky as it might appear to be at first glance.

Image source: Getty Images.

Verizon Communications At 6%, Verizon offers investors a generous yield at a time when payouts are incredibly low due to rising stock valuations. The S&P 500, for example, yields just 1.1%. That means, with Verizon, investors are getting more than five times the dividend income as with a typical stock in the broad index.

It's a great deal for income investors, especially since Verizon's business is doing just fine. It may not be a growth machine, but it's still doing well and generating single-digit growth, the kind investors might expect from a telecom company. Margins remain good, and Verizon's payout ratio is manageable at around 70% -- there's no cause for alarm regarding its dividend.

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Investing $6,000 into the stock at such a high yield would produce around $360 per year in dividends. And with it trading at less than 10 times its estimated future earnings, based on analyst projections, it's still a fairly cheap buy right now.

United Parcel Service United Parcel Service (UPS) is another high-yielding stock that many investors may be overly worried about. At 5.8%, its yield is nearly as high as Verizon's.

Investors may be spooked that its payout ratio is over 100%. But that doesn't always tell the whole story. UPS reported earnings today, and while net income was down more than 50% in the period ending June 30, the company also incurred restructuring expenses as it looks to improve its operations and efficiency. Its adjusted net income actually rose by 14%.

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CEO Carol Tomé says the business "launched a major transformation" but that it's now "through those bumps" and on a stronger path forward. The company beat expectations for the most recent quarter and also raised its outlook for the year.

Another $6,000 invested in the transportation stock could generate roughly $350 in annual dividend income. Combined with Verizon, that would total about $710.

General Mills The highest-yielding stock on this list belongs to General Mills, the iconic food company. At 6.7%, a $6,000 investment in the stock would produce approximately $400 in annual dividends. Combined with the other investments, that would bring the total to about $1,110.

General Mills posted its year-end results at the start of July, showing minor but stable 1% growth in the last three months of its fiscal year (which ended May 31). It posted a loss for the year overall, as it is also in the midst of restructuring efforts, divesting certain businesses to focus on higher-growth opportunities. By fiscal 2030, General Mills is aiming to achieve $3 billion in cumulative cost savings through its transformation initiative.

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The company has paid dividends consistently to its shareholders for 127 years, without interruption. While it faces challenges, its free cash flow remains strong, totaling $1.6 billion over the past fiscal year -- more than the $1.3 billion it paid in dividends.

General Mills stock is down 19% this year, but with strong brands in its portfolio, a focus on cost reduction, and strong free cash flow, its dividend doesn't look to be in any imminent danger. With the stock also trading at just 12 times its estimated future earnings, it could be a good value stock to buy today.

UPS Just Gave Investors a Second Chance to BuyUnited Parcel Service NYSE: UPS raised its full-year 2026 outlook after reporting second-quarter revenue and operating-profit growth, citing the completion of its planned reduction of lower-yielding Amazon volume, network reconfiguration efforts and gains in higher-value shipping segments.

UPS reported second-quarter consolidated revenue of $22.8 billion, up 7.6% from a year earlier, while adjusted operating profit rose 12% to $2.1 billion. Adjusted operating margin increased 40 basis points year over year to 9.2%, and diluted earnings per share were $1.76. The company said GAAP results included $891 million, or $1.05 per diluted share, in after-tax transformation charges, primarily related to employee separation costs from its Driver Choice Program.

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Amazon Weaponizes Logistics, Triggering Sector-Wide SelloffCEO Carol Tomé said the company had completed an 18-month effort to reduce Amazon volume and reshape its U.S. network. UPS eliminated about 2 million lower-quality Amazon packages per day, removed approximately $4.5 billion in related expense, and reconfigured and automated facilities to support more profitable growth opportunities, according to Tomé.

“We now have a leaner, more automated, more agile network that will deliver operating leverage as volume grows,” Tomé said. “Incremental volume today carries materially better economics than before because of the structural changes we’ve made.”

U.S. Domestic Margin Expands UPS Stock Reversal Is Backed by Institutions—And a 6% YieldUPS’s U.S. Domestic segment generated $14.9 billion in revenue, up 6% from the prior-year quarter. Average daily volume fell 3.3%, reflecting the planned Amazon volume reduction, but revenue per piece increased 9.3%. More than half of the revenue-per-piece increase came from base-rate gains and customer mix improvements, with fuel accounting for the remainder, CFO Brian Dykes said.

U.S. Domestic operating profit rose 21% to $1.2 billion, while the segment’s operating margin increased 100 basis points to 8%. Dykes said the company’s revenue per piece grew 130 basis points faster than cost per piece, aided by productivity gains in its reconfigured network.

UPS said it expects to maintain a 50- to 100-basis-point spread between revenue per piece and cost per piece as it pursues margin expansion. Dykes said the company is targeting base-price growth in a range of roughly 250 to 350 basis points, supplemented by gains from customer mix.

The company’s small and medium-sized business average daily volume rose 4.3% year over year, with growth across nearly all sectors and particularly strong demand from high-tech and healthcare customers. SMB shipments represented 34.5% of total U.S. volume, up 250 basis points from the prior year. UPS said B2B average daily volume declined 3.2%, though that represented a 190-basis-point improvement in the rate of decline compared with the first quarter.

Automation, RFID and Premium Services Tomé highlighted UPS’s investment in radio-frequency identification technology and artificial intelligence as key elements of its growth strategy. By the end of the second quarter, 68.5% of U.S. volume was moving through automated buildings, compared with 64% a year earlier. UPS said cost per piece in an automated building is about 28% lower than in a non-automated building.

The company has deployed RFID sensing technology across U.S. delivery facilities and package cars, and all packages shipped through its 5,500 UPS Store locations are RFID-enabled. Tomé said the system is intended to reduce manual scans, improve package visibility and help the company make near-real-time network decisions through an AI-powered digital model of its operations.

UPS also continued to emphasize growth in its Digital Access Program, healthcare logistics and industrial services. Global Digital Access Program revenue totaled $1.4 billion during the quarter, marking the third straight quarter above $1 billion. B2B Digital Access Program average daily volume rose 34% year over year.

Healthcare revenue exceeded $3 billion for the second consecutive quarter. The company added 27 temperature-controlled cross-dock facilities to support cold-chain shipments, and Tomé said UPS’s ownership of assets throughout the healthcare supply chain differentiates it from competitors. Kate Gutmann, executive vice president and president of International, Healthcare and Supply Chain Solutions, said cold-chain revenue was growing at a double-digit rate.

International Profit Declines Despite Revenue Growth The International segment reported revenue of $5 billion, up 12.5% year over year, driven by an 18.9% increase in revenue per piece. However, operating profit declined $59 million to $623 million, and operating margin fell to 12.4%.

Dykes said higher fuel costs had a greater margin impact internationally because of the segment’s air-heavy operations and longer flight distances. UPS also incurred costs related to rerouting aircraft and using leased aircraft amid conflict in the Middle East.

International average daily volume fell 5.8%, including declines in European domestic activity. Export volume declined 4.2%, though UPS returned to year-over-year growth on the China-to-U.S. lane beginning in May as it lapped the prior-year elimination of the de minimis exemption for Chinese imports. Asia-to-Asia export volume rose 13.6% following investments in the region.

Supply Chain Solutions revenue increased $207 million from a year earlier to $2.9 billion. The segment’s operating profit rose $79 million to $291 million, with margin expanding 220 basis points to 10.2%. UPS said forwarding revenue rose 8.1%, logistics revenue increased 4.3%, and UPS Digital revenue grew more than 30%.

Outlook Raised for 2026 UPS raised its 2026 consolidated revenue outlook to approximately $91.2 billion and increased its operating-profit expectation to about $8.65 billion. The company now expects diluted earnings per share of approximately $7.22.

U.S. Domestic revenue is expected to total about $60 billion, with a full-year operating margin of roughly 7.5%. International revenue is projected to grow in the mid-single digits, with an operating margin in the mid-teens. Supply Chain Solutions revenue is expected to grow in the high single digits, with a 10% to 11% operating margin. Capital expenditures are expected to be about $3 billion, while free cash flow is projected at approximately $5.5 billion. UPS expects third-quarter U.S. average daily volume to decline in the mid-single digits, reflecting seasonal trends and the completed Amazon reduction. The company expects U.S. Domestic revenue to be approximately flat in the third quarter, with a margin near 7%, before forecasting improved margin performance in the fourth quarter.

Amazon represented 9% of UPS revenue in the second quarter, down about 100 basis points from a year earlier, Tomé said. The company said it will continue to work with Amazon to optimize the volume handled through its network while focusing its own growth efforts on higher-value segments including SMB, healthcare and B2B customers.

About United Parcel Service (NYSE:UPS)United Parcel Service NYSE: UPS is a global package delivery and supply chain management company that provides a broad range of transportation, logistics and e-commerce services. Its core business centers on small-package delivery and last-mile distribution for business and individual customers, supported by a network of ground transportation, air cargo operations (UPS Airlines) and sorting facilities. In addition to parcel delivery, UPS offers freight transportation, contract logistics, warehousing, customs brokerage and reverse-logistics solutions designed to support domestic and international commerce.

The company traces its roots to 1907 when it began as a small messenger service in the United States and later evolved into the United Parcel Service.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

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by Kurt Schlosser on Jul 28, 2026 at 10:18 amJuly 28, 2026 at 10:19 am

A UPS truck makes its way through downtown Seattle. (GeekWire File Photo / Kurt Schlosser) Handling fewer packages for Amazon is boosting the financial outlook for UPS, as CEO Carol Tomé said Tuesday that the delivery giant has successfully completed its planned volume pullback and is pivoting toward higher-margin shipments.

“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 in the company’s second quarter earnings release.

The “glide-down” caps an 18-month UPS strategy initiated in early 2025 to scale back low-margin e-commerce shipments for Amazon. During the pandemic peak, Amazon generated over 13% of UPS’s total revenue, but executives repeatedly pointed to that low-yielding volume as “extraordinarily dilutive” to profit margins.

Last year, Tomé addressed UPS’s 30-year relationship with Amazon, saying, “They are our largest customer, but they’re not our most profitable customer.”

Speaking on CNBC on Tuesday, Tomé confirmed that Amazon now accounts for roughly 9% of UPS’s business, marking the completion of the planned pullback.

Asked about Amazon’s growing footprint as a direct logistics rival through Amazon Shipping, Tomé dismissed concerns that the e-commerce giant was poaching core customers, drawing a sharp distinction between network strengths.

While Amazon thrives in lightweight, short-distance urban deliveries, Tomé emphasized that UPS maintains an edge across “every other place” — from complex B2B routes to time-sensitive cold chain logistics. By shedding roughly 2 million lower-margin Amazon packages per day, UPS says it freed up critical capacity across its ground and air networks.

UPS posted second-quarter revenue of $22.8 billion — a 7.6% increase year-over-year that topped Wall Street estimates. The courier raised its full-year 2026 revenue forecast to approximately $91.2 billion (up from $89.7 billion).

Despite the earnings beat and raised guidance, UPS shares dropped nearly 5% in early trading as investors weighed transformation costs and broader consumer spending concerns.

Amazon reports its second-quarter earnings on Thursday.

Previous StoryJeff Bezos says this business is becoming Amazon’s next ‘pillar’

United Parcel Service Inc (NYSE:UPS) shares fell 6% following its second quarter 2026 earnings report as investors focused on weaker near-term domestic expectations, lower international operating profit and significant restructuring charges despite the company beating quarterly estimates and raising its full-year outlook.

UPS reported adjusted earnings per share of $1.76 for the quarter, ahead of analyst expectations of $1.66, while revenue of $22.8 billion also exceeded estimates of $21.84 billion.

The company’s US Domestic segment reported revenue growth of 6% year-over-year to $14.9 billion, driven by a 9.3% increase in revenue per piece.

However, management’s third quarter outlook indicated that domestic revenue is expected to remain flat year-over-year, with average daily volume expected to decline by mid-single digits. The outlook raised concerns that the recovery following the company’s Amazon volume reduction and related network reconfiguration initiatives could take longer to materialize.

UPS’s International segment also faced profitability pressure. While revenue increased 12.5% year-over-year to $5.04 billion, operating profit declined to $623 million from $672 million in the prior-year period. The company faced higher expenses, including increased fuel and operational network costs related to geopolitical conflicts in the Middle East, which weighed on overseas margins.

Investors also focused on the impact of UPS’s restructuring efforts, with the company recording $891 million in after-tax transformation charges during the quarter. The costs were primarily related to employee separation expenses from the recently completed Driver Choice Program, which included workforce reduction initiatives involving approximately 7,500 drivers.

For 2026, UPS now expects consolidated revenue of approximately $91.2 billion, non-GAAP adjusted operating profit of approximately $8.65 billion and adjusted diluted earnings per share of approximately $7.22.

The company also maintained expectations for about $3 billion in capital expenditures and around $5.4 billion in dividend payments, subject to board approval.

United Parcel Service Inc (NYSE:UPS) shares fell 6% following its second quarter 2026 earnings report as investors focused on weaker near-term domestic expectations, lower international operating profit and significant restructuring charges despite the company beating quarterly estimates and raising its full-year outlook.

UPS reported adjusted earnings per share of $1.76 for the quarter, ahead of analyst expectations of $1.66, while revenue of $22.8 billion also exceeded estimates of $21.84 billion.

The company’s US Domestic segment reported revenue growth of 6% year-over-year to $14.9 billion, driven by a 9.3% increase in revenue per piece.

However, management’s third quarter outlook indicated that domestic revenue is expected to remain flat year-over-year, with average daily volume expected to decline by mid-single digits. The outlook raised concerns that the recovery following the company’s Amazon volume reduction and related network reconfiguration initiatives could take longer to materialize.

UPS’s International segment also faced profitability pressure. While revenue increased 12.5% year-over-year to $5.04 billion, operating profit declined to $623 million from $672 million in the prior-year period. The company faced higher expenses, including increased fuel and operational network costs related to geopolitical conflicts in the Middle East, which weighed on overseas margins.

Investors also focused on the impact of UPS’s restructuring efforts, with the company recording $891 million in after-tax transformation charges during the quarter. The costs were primarily related to employee separation expenses from the recently completed Driver Choice Program, which included workforce reduction initiatives involving approximately 7,500 drivers.

For 2026, UPS now expects consolidated revenue of approximately $91.2 billion, non-GAAP adjusted operating profit of approximately $8.65 billion and adjusted diluted earnings per share of approximately $7.22.

The company also maintained expectations for about $3 billion in capital expenditures and around $5.4 billion in dividend payments, subject to board approval.

For the quarter ended June 2026, United Parcel Service (UPS - Free Report) reported revenue of $22.83 billion, up 7.6% over the same period last year. EPS came in at $1.76, compared to $1.55 in the year-ago quarter.

The reported revenue represents a surprise of +4.98% over the Zacks Consensus Estimate of $21.75 billion. With the consensus EPS estimate being $1.65, the EPS surprise was +6.67%.

While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance.

Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance.

Here is how UPS performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:

Average revenue per piece - International Package - Total: $25.13 versus $23.03 estimated by four analysts on average.Average daily package volume - International Package - Export: 1.61 million versus the four-analyst average estimate of 1.61 million.Average daily package volume - International Package - Domestic: 1.39 million versus 1.42 million estimated by four analysts on average.Average revenue per piece - U.S. Domestic Package - Ground: $12.35 versus the four-analyst average estimate of $12.34.Revenue- International Package- Cargo and other: $213 million versus the five-analyst average estimate of $174.31 million. The reported number represents a year-over-year change of +24.6%.Revenue- U.S. Domestic Package- Ground: $10.91 billion versus the five-analyst average estimate of $10.71 billion. The reported number represents a year-over-year change of +4%.Revenue- U.S. Domestic Package- Deferred: $1.1 billion versus $1.05 billion estimated by five analysts on average. Compared to the year-ago quarter, this number represents a +7.6% change.Revenue- U.S. Domestic Package: $14.93 billion compared to the $14.47 billion average estimate based on five analysts. The reported number represents a change of +6% year over year.Revenue- International Package: $5.04 billion versus $4.63 billion estimated by five analysts on average. Compared to the year-ago quarter, this number represents a +12.5% change.Revenue- Supply Chain Solutions: $2.86 billion versus $2.71 billion estimated by five analysts on average. Compared to the year-ago quarter, this number represents a +7.8% change.Revenue- U.S. Domestic Package- Next Day Air: $2.58 billion versus the five-analyst average estimate of $2.44 billion. The reported number represents a year-over-year change of +12.4%.Revenue- International Package- Domestic: $869 million versus the five-analyst average estimate of $847.25 million. The reported number represents a year-over-year change of +4.7%.View all Key Company Metrics for UPS here>>>

Shares of UPS have returned +4.6% over the past month versus the Zacks S&P 500 composite's +1.7% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term.

United Parcel Service (UPS - Free Report) came out with quarterly earnings of $1.76 per share, beating the Zacks Consensus Estimate of $1.65 per share. This compares to earnings of $1.55 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of +6.67%. A quarter ago, it was expected that this package delivery service would post earnings of $1.04 per share when it actually produced earnings of $1.07, delivering a surprise of +2.88%.

Over the last four quarters, the company has surpassed consensus EPS estimates four times.

UPS, which belongs to the Zacks Transportation - Air Freight and Cargo industry, posted revenues of $22.83 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 4.98%. This compares to year-ago revenues of $21.22 billion. The company has topped consensus revenue estimates four times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

UPS shares have added about 13.9% since the beginning of the year versus the S&P 500's gain of 8.3%.

What's Next for UPS?While UPS has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for UPS was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.75 on $22.09 billion in revenues for the coming quarter and $7.10 on $90.32 billion in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Transportation - Air Freight and Cargo is currently in the top 40% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

GXO Logistics (GXO - Free Report) , another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 4.

This contract logistics provider is expected to post quarterly earnings of $0.58 per share in its upcoming report, which represents a year-over-year change of +1.8%. The consensus EPS estimate for the quarter has been revised 0.3% higher over the last 30 days to the current level.

GXO Logistics' revenues are expected to be $3.45 billion, up 4.6% from the year-ago quarter.

United Parcel Service on Tuesday posted second-quarter earnings results that beat Wall Street expectations and raised its full-year outlook.

Shares of the delivery giant rose slightly in premarket trading.

Here's how the company performed in its second quarter, compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

Earnings per share: $1.76 adjusted vs. $1.66 expectedRevenue: $22.8 billion vs. $21.81 billion expectedFor the quarter ended June 30, UPS reported net income of $604 million, or 71 cents per share, down significantly from $1.28 billion, or $1.51 per share, in the year-ago period. Adjusting for one-time items, the company reported a profit of $1.5 billion, or $1.76 per share.

The company also raised its full-year 2026 guidance, now expecting consolidated revenue of $91.2 billion and adjusted diluted EPS of roughly $7.22 per share.

"Our second-quarter results marked an expected and significant shift in our performance and we delivered both consolidated revenue and non-GAAP adjusted operating profit growth," CEO Carol Tomé said in a release. "We entered the second half of the year with strong momentum and are raising our full-year consolidated revenue, non-GAAP adjusted operating profit and non-GAAP adjusted diluted EPS guidance."

UPS is in the midst of a turnaround strategy aimed at positioning the company for long-term and sustainable growth. The company is focused on enhancing automation in its networks and tapping into growing markets, including healthcare logistics.

For the second quarter, UPS reported a 6% increase in domestic revenue, driven by an increase in revenue per piece, and a 12.5% increase in international revenue. Supply chain solutions revenue rose 7.8%, in part due to growth in healthcare logistics.

The company added that it has achieved roughly $1.2 billion of program benefits from its network reconfiguration program, expecting to reach $3 billion by the end of the year.