Computed from published fixed rules, not a model's judgement — though one input, the count of high-severity risks, comes from the AI analysis below.
Not investment advice and not a price target: it scores the quarter's fundamentals, not the stock. Full methodology →
AI Takeaway
UPS's second quarter of fiscal 2026 was defined by robust revenue growth that was offset by a severe contraction in profitability. A 60% spike in fuel costs and higher purchased transportation expenses drove operating income down 49%, with the U.S. domestic segment's margin shrinking to near zero. The company is undergoing a network reconfiguration, closing facilities to improve long-term efficiency, but near-term pressures from labor negotiations and cost inflation persist.
Revenue
$22.83B
+7.60% YoY
EPS (Diluted)
$0.71
-52.98% YoY
Operating Income
$930M
-48.96% YoY
Source: SEC XBRL
United Parcel Service (UPS) reported Q2 FY2026 revenue of $22.83B, up 7.6% year over year. Operating margin was 4.1%, down 4.5 points from 8.6% a year earlier. UPS's fiscal Q2 FY2026 corresponds to calendar Q2 2026.
Last 4 quarters: 4 beats
| Quarter | Actual EPS (USD) | Consensus (USD) | Result |
|---|---|---|---|
| Jun 2026This filing | 1.76 | 1.68 | Beat +4.9% |
| Mar 2026 | 1.07 | 1.03 | Beat +3.8% |
| Dec 2025 | 2.38 | 2.22 | Beat +7.0% |
| Sep 2025 | 1.74 | 1.31 | Beat +32.7% |
Adjusted (non-GAAP) EPS of $1.76 versus the $1.68 analyst consensus — a +4.9% beat for Jun 2026. Analyst consensus is quoted on the adjusted (non-GAAP) basis the street uses. GAAP diluted EPS for this quarter was $0.71.
2 reported regions · SEC XBRL
Revenue across regions totals $19.97B; with $2.86B of reconciling items (corporate, unallocated and eliminations) it ties to the $22.83B of consolidated revenue on the income statement.
Profit above is reported as operating income, the measure UPS itself discloses in this filing. Each company chooses its own measure here, so these margins are not comparable with another company's.
Compiled by AI from this SEC filing
During the first half, UPS permanently closed 44 buildings as part of its Network Reconfiguration and Efficiency Reimagined initiatives, with more closures possible.
Source: 10-Q Note 5 Property, Plant and Equipment
Sales of properties and aircraft parts generated $101 million in gains in Q2 2026, partially offsetting higher operating expenses.
Source: 10-Q Note 5 Property, Plant and Equipment
The Global Freight Forwarding and Healthcare Logistics and Distribution reporting units have limited excess fair value over carrying value, signaling potential future impairment risk.
Source: 10-Q Note 7 Goodwill and Intangible Assets
UPS contributed $434 million to pension plans and $147 million to postretirement medical plans in the first half, with additional contributions of ~$733 million expected for the year.
Source: 10-Q Note 6 Employee Benefit Plans
The collective bargaining agreement with the Independent Pilots Association became amendable September 2025, and negotiations are ongoing.
Source: 10-Q Note 6 Employee Benefit Plans
Compiled by AI from this SEC filing · 1 high, 4 medium, 0 low
Sharp increases in fuel prices and purchased transportation costs have significantly eroded operating margins, with U.S. Domestic margin falling to near zero. If these cost pressures persist, profitability could remain under pressure.
Source: 10-Q Income Statement (XBRL)
UPS is in negotiations with its pilots' union (IPA), and any work stoppage or unfavorable settlement could increase labor costs or disrupt operations.
Source: 10-Q Note 6 Employee Benefit Plans
The Global Freight Forwarding and Healthcare Logistics and Distribution reporting units have limited excess fair value over carrying value, making them susceptible to impairment if performance weakens.
Source: 10-Q Note 7 Goodwill and Intangible Assets
Cash and equivalents fell 24.9% year-to-date, while debt remains elevated with a debt-to-equity ratio of 1.62. This could limit financial flexibility.
Source: 10-Q Balance Sheet (XBRL)
UPS's business is sensitive to global economic conditions and trade tariffs, which could reduce shipping volumes or alter supply chains, impacting revenue and profitability.
Source: 10-Q Cautionary Statement Regarding Forward-Looking Statements
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue $B | 22.83 $B | 21.22 $B | +7.60% |
Operating Income $B | 0.93 $B | 1.82 $B | -48.96% |
Net Income $B | 0.60 $B | 1.28 $B | -52.92% |
EPS (Basic) $ | 0.71 $ | 1.51 $ | -52.98% |
EPS (Diluted) $ | 0.71 $ | 1.51 $ | -52.98% |
Answers draw on this SEC filing and the data on this page
Expected release date, analyst estimates & what to watch
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%.
UPS reported a challenging FY2025 with revenue declining 2.6% to $88.7B and operating income falling 7.1% to $7.9B, reflecting ongoing volume pressures and margin compression, though the balance sheet remained solid with a current ratio above 1.2x.
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