United Parcel Service reported higher fourth-quarter profit despite booking charges linked to the retirement of an aircraft fleet, and said it expects revenue to rise in the coming year as its restructuring programme begins to deliver results.
Shares in the delivery giant climbed more than 2% after the results were released, reflecting investor optimism that the company’s turnaround strategy is gaining momentum.
UPS said on Tuesday it earned $1.79 billion, or $2.10 per share, in the quarter, compared with $1.72 billion, or $2.01 per share, a year earlier.
The company recorded $238 million in charges during the period, including a $137 million write-off related to the retirement of its MD-11 aircraft fleet, which it said was completed during the quarter.
Excluding one-off items such as the fleet write-off and about $100 million in restructuring-related costs, adjusted earnings came in at $2.38 per share.
That exceeded the $2.20 per share expected by analysts surveyed by FactSet.
Revenue fell 3.2% to $24.48 billion, reflecting lower volumes, but still topped Wall Street forecasts of $24.01 billion.
Further job cuts planned in 2026
UPS also said it plans to cut up to 30,000 operational roles in 2026, extending a sweeping overhaul aimed at streamlining its network and shifting toward higher-margin shipments.
The announcement follows workforce reductions last year of about 48,000 roles, including roughly 14,000 management positions.
As part of the restructuring, UPS has closed daily operations at 93 owned and leased facilities and increased its use of automation.
The company said it would continue reviewing changes in volume across its integrated air and ground network to identify additional buildings for potential closure.
The restructuring was triggered in part by UPS’s decision to scale back volumes from Amazon.com, once its largest customer.
The company has said the move allows it to prioritize more profitable business rather than chasing volume at lower margins.
Guidance points to inflection year
Looking ahead, UPS forecast revenue of about $89.7 billion in 2026, ahead of the $88.05 billion expected by analysts.
It also said it plans capital expenditures of around $3 billion and dividend payments of approximately $5.4 billion, subject to board approval.
Chief executive Carol Tomé said 2026 would mark an inflection point for the company as it completes the planned reduction in Amazon volumes and reaps the benefits of its restructuring.
“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,” she said.
Trade frictions between the United States and China remain a headwind, alongside broader shifts in global supply chains.
Even so, investor sentiment has improved, with UPS shares rising more than 10% since the start of the year.
Dividends attract income-focused investors
While revenue growth remains challenging, UPS’s valuation and dividend yield continue to appeal to income-focused investors.
The company’s quarterly dividend of $1.64 per share translates into an annualized yield of more than 6%, well above the S&P 500’s yield of about 1.8% and more than double short-term interest rates.
Analyst opinion on the stock remains mixed.
About two-thirds of analysts tracked by FactSet rate UPS as a hold or sell, and the highest price target stands at $108, below current trading levels.
Still, some analysts pointed to improving pricing and margins.
Evercore ISI said UPS delivered another quarterly beat, driven by stronger-than-expected revenue per piece in both domestic and international operations.
Raymond James analysts added that domestic ground volumes and international margins exceeded expectations, reinforcing management’s view that 2026 will be a turning point.
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