United Parcel Service Inc reported stronger-than-expected fourth-quarter results, beating forecasts on both earnings and revenue, amid improved revenue quality, disciplined cost management and continued network efficiency gains.
Fourth-quarter non-GAAP adjusted diluted earnings per share came in at $2.38, ahead of expectations for $2.20. Consolidated revenue totalled $24.5 billion, also exceeding the $24.01 billion analysts had anticipated.
The company said operational execution across business segments and ongoing efficiency initiatives underpinned the outperformance.
A key strategic milestone was the reduction of Amazon volume in UPS’s network by approximately one million packages per day. Management said network reconfiguration and efficiency programmes tied to this shift generated about $3.5 billion in savings.
The results come against a challenging macroeconomic backdrop. UPS pointed to significant changes in global trade policies and rising geopolitical tensions in 2025, which weighed on shipping volumes and business confidence.
The company booked total charges of $238 million in the fourth quarter, including a non-cash after-tax charge of $137 million related to the write-off of its MD-11 aircraft fleet.
For 2026, UPS projected revenue of $89.7 billion and operating profit of $8.6 billion. Wall Street had been expecting revenue of about $88 billion and operating profit of $8.6 billion, placing the company’s top-line outlook slightly ahead of consensus.
Carol Tomé, UPS chief executive officer noted: “2025 was a year of considerable progress for UPS as we took action to strengthen our revenue quality and build a more agile network. 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."
The company’s deliberate move away from lower-margin Amazon business continues to reshape its cost base and workforce.
UPS said it plans to reduce headcount by a further 30,000 employees in 2026 as part of ongoing network adjustments. These reductions are expected to be achieved primarily through attrition, alongside another voluntary separation programme for full-time drivers.
“This will be accomplished through attrition, and we expect to offer a second voluntary separation program for full-time drivers,” said CFO Brian Dykes on the UPS earnings conference call.
UPS had about 490,000 employees globally, with nearly 78,000 in management roles, according to its most recent annual report.
The company has a largely unionised workforce, and management indicated many of the reductions would come from not replacing departing part-time staff. Layoffs are not currently planned, Dykes said.
In 2025, UPS eliminated 48,000 jobs, launched driver buyouts and closed operations at 93 facilities as Amazon volumes declined. The company also plans to shut a further 24 facilities in 2026 as it shifts capacity towards more profitable segments.
"We're in the final six months of our Amazon accelerated glide down plan and for the full year 2026, we intend to glide down another million pieces per day while continuing to reconfigure our network," CEO Carol Tomé said on a conference call with analysts.
UPS has described the Amazon business as "extraordinarily dilutive" to margins in the past and is accelerating efforts to reduce lower-profit deliveries for the online retailer, which remains both a major customer and a growing logistics competitor.
Rivals, including FedEx, are also contending with persistently soft demand for delivery services.
Separately, the group is working to stabilise volumes following the end of U.S. duty-free, low-value “de minimis” e-commerce shipments from China-linked discount retailers such as Shein and Temu, which had been a notable source of cross-border parcel flows.
UPS expects revenue to decline in the first half of 2026 as the Amazon glide-down progresses, before rising sequentially in the second half once those reductions are largely complete.
Management positioned the year as a transition period, with the network overhaul designed to support stronger margins and more sustainable growth beyond the near term.
Investor sentiment has remained cautious. Prior to the results, UPS shares were down 19% over the past 12 months.
During Tuesday's regular trade, United Parcel Service (NYSE: UPS) stock closed at US$107.20, up 0.2% Monday's close, before rising 0.3% in after-hours trade. UPS' market cap stands at $90.95 billion.
