United Parcel Service UPS is scheduled to report second-quarter 2026 results on July 28, before market open.
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share and revenues is pegged at $1.65 and $21.75 billion, respectively.
The bottom-line projection indicates a year-over-year increase of 6.5%. The consensus mark for the to-be-reported quarter has remained stable over the past 60 days. The Zacks Consensus Estimate for quarterly revenues implies a year-over-year expansion of 2.5%.
For full-year 2026, the Zacks Consensus Estimate for UPS’ revenues is pegged at $90.32 billion, implying an increase of 1.9% year over year. The consensus mark for full-year EPS is pinned at $7.10, calling for a 0.8% year-over-year contraction. The consensus mark for 2026 EPS has remained stable over the past 60 days.
UPS’ earnings beat the Zacks Consensus Estimate in three of the trailing four quarters (missing the mark once). The average beat is 10.6%.
United Parcel Service Price and EPS Surprise
United Parcel Service price-eps-surprise | United Parcel Service Quote
Given this backdrop, let us examine the factors that might have influenced UPS’ performance in the to-be-reported quarter.
The interim peace deal between the United States and Iran has resulted in a sharp fall in oil prices. This development is likely to have aided UPS’ bottom-line performance since expenses on fuel represent a key input cost for transportation stocks.
Despite having come down from the highs witnessed when the war between the nations was in full flow, oil prices are fluctuating, given the fragility of the interim peace deal. In this scenario, focus will also be on UPS’ guidance for the September quarter as well as for full-year 2026.
UPS’ decision to scale back business with Amazon AMZN is expected to have kept second-quarter volumes muted. Management reached an agreement in principle with Amazon to reduce the e-commerce giant’s volume by more than 50% by June 2026. CEO Carol Tome noted that Amazon was not the company’s most profitable customer. The reduction in volumes is compelling UPS to right-size its network. We expect consolidated average daily volumes to decrease 5.2% in the June quarter from the year-ago actual.
Second-quarter results are likely to reflect UPS’ efforts toward improving profitability over sheer volume. Under the cost-cutting initiatives, UPS has substantially reduced its U.S. operational workforce and closed daily operations at multiple leased and owned buildings. Moreover, UPS has been focusing on increasing automation in sorting and operations and leveraging AI for logistics planning to boost efficiency.
The shift in focus toward higher-margin areas such as small and medium-sized businesses or SMBs and healthcare logistics from low-margin volumes (like Amazon) is expected to be reflected in UPS’ second-quarter results and to aid its per-package revenues. We expect consolidated average revenue per piece to increase 9.2% in the June quarter from the year-ago actual.
Notably, SMBs contributed 34.5% to total U.S. volume in the March quarter, reflecting the highest SMB penetration in UPS’ history. We expect SMBs to have performed strongly in the June quarter as well, boosting results.
In terms of B2B, this represented 45.2% of its total U.S. volume in the March quarter, which was a 140-basis point improvement compared with the first quarter of 2025 and also the highest first quarter B2B penetration in six years. Currently, UPS focuses on premium segments like SMB, B2B and complex health care, and the trend is likely to have continued in the June quarter as well.
What Our Model Says About UPS
Our proven model conclusively predicts an earnings beat for UPS this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is exactly the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
UPS has an Earnings ESP of +1.06% (the Most Accurate Estimate is a cent above the Zacks Consensus Estimate) and a Zacks Rank #3.
Highlights of UPS’ Q1 Earnings
Quarterly earnings per share (excluding 5 cents from non-recurring items) of $1.07 beat the Zacks Consensus Estimate of $1.04 but declined 28.2% year over year. Revenues of $21.2 billion surpassed the Zacks Consensus Estimate of $21 billion but decreased 1.6% year over year.
U.S. Domestic Package revenues of $14.1 billion (above our estimate of $13.8 billion) decreased 2.3% year over year, owing to an expected decline in volume. Revenue per piece grew 8.3% year over year. Segmental operating profit (adjusted) fell 44.1% year over year to $565 million. The adjusted operating margin for the segment was 4%.
Other Stocks to Consider
Here are a few other stocks from the broader Zacks Transportation sector that investors may consider, as our model shows that these too have the right combination of elements to beat on earnings this reporting cycle.
CSX Corporation CSX has an Earnings ESP of +0.95% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
CSX is scheduled to report second-quarter 2026 earnings on July 22. The Zacks Consensus Estimate for second-quarter 2026 earnings has been revised upward by 3 cents over the past 30 days to 50 cents per share. CSX’s earnings beat the Zacks Consensus Estimate in three of the preceding four quarters and missed in the remaining one, the average beat being 3.2%.
Union Pacific UNP has an Earnings ESP of +0.34% and a Zacks Rank #3 at present. UNP is scheduled to report second-quarter 2026 earnings on July 23.
The Zacks Consensus Estimate for Union Pacific’s second-quarter 2026 earnings has moved up by 6 cents to $3.20 per share over the past 30 days. Union Pacific’s earnings beat the Zacks Consensus Estimate in three of the preceding four quarters (missing the mark on the other occasion). The average beat is 2.3%.
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United Parcel Service, Inc. (UPS): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).