AI Takeaway
UPS reported a challenging Q1 2026 with revenue declining 1.6% YoY to $21.2B and net income falling 27.2% to $864M, reflecting significant margin compression as operating margin dropped nearly 180 basis points to 6.0%.
Revenue
$21.2B
-1.60% YoY
EPS (Basic)
$1.02
-27.14% YoY
Operating Income
$1.27B
-23.95% YoY
Filed · Source: SEC EDGAR 10-Q filing
Total revenue fell to $21.2B in Q1 2026 from $21.5B in Q1 2025, a 1.6% YoY decrease, suggesting ongoing softness in package volumes or pricing headwinds across UPS's domestic and international segments.
Source: Source: 10-Q Income Statement (XBRL Financial Data)
Operating income dropped 23.9% YoY to $1.27B from $1.67B, with operating margin compressing from 7.7% to 6.0%, indicating that cost pressures are outpacing revenue generation and efficiency efforts.
Source: Source: 10-Q Income Statement (XBRL Financial Data)
Net income fell 27.2% YoY to $864M, and both basic and diluted EPS declined 27.1% to $1.02 from $1.40, reflecting the combined impact of lower revenues and higher relative costs.
Source: Source: 10-Q Income Statement & EPS Data (XBRL Financial Data)
2 more insights available
Upgrade to unlockOperating margin fell from 7.7% to 6.0% YoY, a decline of approximately 175 basis points, while net margin stands at just 4.1%. If cost pressures — including labor, fuel, and network restructuring — persist without revenue recovery, profitability could deteriorate further.
Source: Source: 10-Q Income Statement (XBRL Financial Data)
Unlock 4 more detailed risk analysis
Upgrade to unlockReported EPS of $1.07 versus the $1.03 analyst consensus — a +3.8% beat for Q1 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $21.2B | $21.55B | -1.60% |
Operating Income | $1.27B | $1.67B | -23.95% |
Net Income | $864M | $1.19B | -27.21% |
EPS (Basic) | $1.02 | $1.40 | -27.14% |
EPS (Diluted) | $1.02 | $1.40 | -27.14% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $71.81B | $68.47B | +4.88% |
Current Assets | $17.79B | $17.09B | +4.12% |
Current Liabilities | $14.67B | $15.66B | -6.30% |
Stockholders' Equity | $15.76B | $15.66B | +0.66% |
Cash & Equivalents | $5.8B | $4.8B | +20.82% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $2.22B | $2.32B | -4.06% |
Investing Cash Flow | $-944M | $-1.35B | +30.33% |
Financing Cash Flow | $-1.33B | $-2.31B | +42.59% |
Dividends Paid | $1.35B | $1.35B | +0.30% |
Share Buybacks | $0 | $1B | -100.00% |
D&A | $791M | $743M | +6.46% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Margin | 6.0% | 7.7% | -1.76% |
Net Margin | 4.1% | — | — |
ROE | 5.5% | — | — |
ROA | 1.2% | — | — |
Current Ratio | $1.213 | — | — |
Other companies in Air Freight & Logistics
UPS had a difficult Q1 2026, with revenue declining 1.6% YoY to $21.2B and net income falling 27.2% to $864M. EPS came in at $1.02, down from $1.40 in Q1 2025, reflecting significant margin pressure across the business.
The biggest takeaways are a sharp drop in profitability — operating income fell nearly 24% to $1.27B and operating margin compressed to 6.0% from 7.7% — alongside a complete suspension of share buybacks. On the positive side, UPS's cash balance grew 20.8% YoY to $5.8B and dividends were maintained at $1.35B.
No, UPS did not cut its dividend in Q1 2026; dividends paid were $1.35B, essentially flat compared to $1.35B in Q1 2025 (+0.3% YoY). However, UPS did suspend share buybacks entirely, having repurchased $1.0B worth of shares in Q1 2025.
UPS's net income dropped 27.2% YoY to $864M primarily due to operating margin compression, with operating income falling 23.9% to $1.27B against only a 1.6% revenue decline, suggesting costs rose faster than revenues. Rising D&A (up 6.5% to $791M) and broader cost pressures in its logistics network contributed to the earnings decline.
UPS maintains adequate short-term liquidity with a current ratio of 1.21 and a strong cash balance of $5.8B (up 20.8% YoY), and operating cash flow remains solid at $2.22B. However, profitability metrics are under pressure, with ROE at 5.5% and ROA at just 1.2%, and the suspension of buybacks suggests management is being cautious with capital allocation.