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UPS · Q2 2026
Archived report (Q2 2026). Latest deep dive →
The quarter in brief
UPS grew revenue 7.6% on fuel surcharges and rate/mix gains but operating profit collapsed 49% and net income fell 53% as $1.17B of Driver Choice Program separation costs, higher fuel/purchased-transportation expense from Middle East-driven network disruptions, and USPS outsourcing fees overwhelmed underlying cost discipline, masking a healthier ~4.9% non-GAAP adjusted operating expense growth story.
Net Income
$604M
down 52.9% y/y
Revenue
$22,834M
up 7.6% y/y
Operating Profit
$930M
down 49.0% y/y
Operating Expenses
$21,904M
up 12.9% y/y
All figures in $M.
| Line item | Amount and change |
|---|---|
| U.S. Domestic Package | $14,930 · +6.0% |
| International Package | $5,044 · +12.5% |
| Supply Chain Solutions | $2,860 · +7.8% |
| Revenue | $22,834 · +7.6% |
| Operating Expenses | $21,904 · +12.9% |
| Operating Profit | $930 · −49.0% · margin 4.1% (was 8.6%) |
| Net Interest & Other Financial Items | −$169 · vs −$66 |
| Income Before Taxes | $761 · −54.2% |
| Income Tax Expense | $157 · −58.6% |
| Net Income | $604 · −52.9% · diluted EPS $0.71 (was $1.51) |
Verdict: UPS grew revenue 7.6% on fuel surcharges and rate/mix gains but operating profit collapsed 49% and net income fell 53% as $1.17B of Driver Choice Program separation costs, higher fuel/purchased-transportation expense from Middle East-driven network disruptions, and USPS outsourcing fees overwhelmed underlying cost discipline, masking a healthier ~4.9% non-GAAP adjusted operating expense growth story.
OCF $3,083M (H1) · Capex $1,724M (H1) · Dividends $2,708M paid (H1), $1.64/share quarterly · buyback: none in Q2 (2023 authorization has $1.3B remaining) · FY2026 capex guide ≈$3.0B
Source and notation
* marks non-cash / ≈ estimated. Source: United Parcel Service press release / 10-Q (SEC EDGAR).
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<figure> <a href="https://whoreportstoday.com/t/ups/q2-2026"><img src="https://whoreportstoday.com/t/ups/q2-2026/sankey.png" alt="UPS Q2 2026: where the revenue went" loading="lazy" style="max-width:100%;height:auto"></a> <figcaption>Source: <a href="https://whoreportstoday.com/t/ups/q2-2026">Who Reports Today</a>, licensed under <a href="https://creativecommons.org/licenses/by/4.0/">CC BY 4.0</a></figcaption> </figure>
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- Operating expenses include $1,172M of Transformation Strategy Costs (mostly Driver Choice Program voluntary separation severance), which alone explain most of the y/y operating profit decline; non-GAAP adjusted operating profit for U.S. Domestic Package actually rose 21%.
- Non-GAAP adjusted diluted EPS was $1.76 vs GAAP $0.71, a wide gap driven almost entirely by the after-tax $891M transformation charge.
- U.S. Domestic Package operating profit cratered to just $16M (GAAP) from $916M, as $1.1B in severance landed in this segment, while International Package (-7.3%) and SCS (+24.4%) moved more moderately.
- Revenue grew despite average daily package volume falling 3.7%, entirely powered by fuel surcharges (Middle East conflict) and rate/product-mix/yield actions; SCS benefited from the Q4-2025 Andlauer Healthcare (AHG) acquisition.
- Effective tax rate fell to 20.6% from 22.8%, helped by OBBBA tax law benefits and foreign tax credits, partially offsetting the operating profit decline's flow-through to net income.
- UPS is pursuing ~$500M in IEEPA tariff refunds following a Supreme Court ruling invalidating certain tariffs; about $200M has already been recovered from CBP.
What distorts the picture in this report and what to watch beyond the headlines.
UPS — United Parcel Service is a global leader in package delivery and supply chain management.
The company is headquartered in Atlanta, Georgia, and operates in over 200 countries.
Heads-up
- net income fell 53% y/y in Q2 2026
Net income for Q2 2026: $604M, −53% y/y. In the report's figures: costs grew faster than revenue: operating expenses +13% y/y. Based on the Q2 2026 report.
Company filings on SEC EDGAR ↗More reports: URI · Q3 2026 · VLTO · Q3 2026 · VRSK · Q2 2026 · VRT · Q3 2026 · WAB · Q3 2026 · WM · Q3 2026 · XYL · Q3 2026 · ADP · Q1 FY2027 · ALLE · Q3 2026 · AME · Q3 2026 · all reports