UPS tops estimates as efficiency drive gains momentum

United Parcel Service Inc. (UPS) shares surged higher on Tuesday morning, as the delivery giant reported strong third-quarter earnings that surpassed analyst expectations. The company posted adjusted earnings per share of $1.69, outperforming the consensus estimate of $1.63. UPS's revenue for the quarter climbed 6.7% year-over-year to $22.9 billion, exceeding the forecast of $22.28 billion.

The company's network efficiency initiatives appeared to be paying off, as all three business segments reported revenue growth. Supply Chain Solutions led the pack with an 18.2% increase year-over-year, International followed with 7.1%, and U.S. Domestic trailed behind with 4.5%. In addition to revenue growth, UPS's adjusted operating margin improved to 9.0%.

CEO Carol Tomé attributed the positive results to a combination of premium growth and enhanced network efficiency. In response to the strong earnings, UPS raised its full-year guidance across key metrics. The company now projects adjusted earnings per share of approximately $7.28 for fiscal 2026, surpassing the consensus estimate of $7.20. Revenue guidance for the year has been raised to approximately $92.6 billion, also above the consensus of $91.74 billion.

Looking ahead to the fourth quarter, UPS anticipates revenue of around $25.7 billion, which is slightly above the consensus estimate of $25.53 billion. The company expects adjusted operating profit of approximately $3.3 billion for the period. On an adjusted basis, the U.S. Domestic segment generated operating profit of $1.03 billion with a 7.0% margin, while International achieved a 14.9% operating margin.

However, Supply Chain Solutions reported a decline in adjusted operating profit from $536 million in the prior-year period to $274 million.