Jan 27 (Reuters) – United Parcel Service on Tuesday beat Wall Street estimates for quarterly results in the all-important holiday period and forecast a surprise rise in annual revenue, as a pivot to higher-margin shipments pays off.
The company in January last year said it would accelerate a plan to slash millions of low-profit deliveries for Amazon.com, its largest customer and a growing delivery rival, calling the business “extraordinarily dilutive” to margins.
“Looking ahead, upon completion of the Amazon glide-down, 2026 will be an inflection point in the execution of our strategy to deliver growth and sustained margin expansion,” UPS CEO Carol Tome said in a statement.
Shares of the company were up 3.7% in premarket trading, while rival FedEx gained about 1%.
Meanwhile, UPS is also looking to rebuild its profitability and stabilize volumes following the end of U.S. duty-free, “de minimis” low-value, e-commerce shipments.
The company recorded a non-cash, after-tax charge of $137 million related to writing off the MD‑11 fleet following a deadly crash. UPS said it completed the retirement of the fleet in the fourth quarter.
Fifteen people, including three crew members, were killed in a November crash of one of its MD-11 cargo jets at the Louisville International Airport.
UPS projected 2026 revenue to be $89.7 billion, compared to the $88.7 billion it reported last year. Analysts on average had expected revenue of $87.94 billion, according to data compiled by LSEG.
It forecasts adjusted operating margin of 9.6% for 2026.
HOLIDAY QUARTER BEAT
UPS reported fourth-quarter consolidated revenue of $24.5 billion, above estimates of $24 billion.
The peak holiday shipping season, which runs from late November into early January, is critical for parcel carriers as their average daily volumes can double, with companies often adding seasonal surcharges.
Revenue per piece in the company’s U.S. domestic segment rose 8.3% despite lower volumes, while international revenue per piece increased 7.1%, benefiting from the company’s push toward higher-margin shipments.
On an adjusted basis, UPS reported a profit of $2.38 per share, for the quarter ended December 31, above estimates of $2.20.
(Reporting by Abhinav Parmar in Bengaluru; Editing by Sriraj Kalluvila)
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