United Parcel Service, Inc. Q2 FY26 Earnings Analysis

- Full-year 2026 consolidated revenue expected to be approximately $89.7 billion, with operating margin around 9.6%. (Page 4) - U.S. domestic: Full-year revenue expected to be flat year-over-year; average daily volume (ADV) down mid-single digits due to Amazon glidedown, offset by mid-single digit revenue per piece growth. (Page 4) - International: Full-year revenue expected to grow low single digits, driven by solid revenue per piece increases; international volume trends improving as trade lanes normalize. (Pages 3,10,12) - Supply Chain Solutions: Revenue expected to increase high single digits in 2026, supported by acquisitions and segment growth. (Page 4) - Premium segments (SMB, B2B, health care) are growth areas, with increasing market share and revenue per piece gains. (Pages 3,6,12) - Health care segment shows strong double-digit operating margins and is a key growth engine globally. (Pages 2,6,12) - Incremental momentum expected in B2B and industrial business, with market share gains excluding Amazon and Chinese e-commerce volume. (Page 12) - Revenue growth and margin expansion anticipated in second half of 2026 post Amazon glidedown completion. (Pages 2,5)

- UPS reaffirms full-year 2026 consolidated financial targets: - Revenue: approx. $89.7 billion - Operating margin: approx. 9.6% - Diluted EPS: expected to be flat to 2025 - Strong underlying business with expected revenue and margin growth in 2H 2026 - Operating margin inflection expected in the back half of 2026 with ongoing cost reductions and network reconfiguration - U.S. Domestic segment operating margin expected between 7% and 8% range in 2026, with opportunity for meaningful margin growth in 2027 - International segment margin expected to be in mid-teens in 2026, with trade lanes normalizing and improving - Supply Chain Solutions operating margin forecasted in the low double digits for 2026 - Continued focus on premium markets (SMB, B2B, healthcare) to drive revenue quality and margin expansion - Cost takedown initiatives on track to achieve targeted $3 billion savings in 2026

- Capital expenditures for 2026 are expected to be about $3 billion. - Ongoing investments in automation and robotic deployments to enhance network productivity and agility. - Network expansions including: - Major expansion of the Incheon airport hub in South Korea. - Largest and most advanced logistics center opened in Taiwan. - Investments to support premium volume growth in U.S. and international markets, especially in SMB, B2B, and health care sectors. - Continued replacement and upgrades of aircraft fleet, specifically replacing MD11 capacity with 767 deliveries. - Strategic investments in premium opportunities in Europe, moving away from low-margin e-commerce to improve margins. - Driver buyout program aimed at reducing full-time driver positions by approximately 7,500 to optimize operational costs.

- The transcript does not mention any current or planned new fundraising through debt or equity. - Capital expenditures are expected to be about $3 billion in 2026. - The company plans to make an annual pension contribution of $1.3 billion. - Free cash flow is expected to be approximately $5.5 billion, including one-time payments related to the Driver Choice program. - Around $5.4 billion in dividends are planned to be paid out in 2026, subject to Board approval. - No indications of issuing new debt or equity were discussed in the provided sections.

The provided document pages do not explicitly mention current or expected orderbook or pending orders figures. However, relevant insights related to business volume and contracts include: - The company has completed a significant Amazon glide down initiative, targeting a 50% reduction in volume delivered for Amazon by June 2026. - Transition to outsourcing part of ground delivery to USPS is ramping up, with gradual volume tendered: about 977,000 ADV (44% of ground paper product) in Q1 and ~1.5 million expected in Q2. - Intentional volume exits from certain B2B segments like Amazon through AFN and Chinese e-commerce returns are ongoing, impacting B2B volume trends. - Growth is focused on premium segments (SMB, B2B, health care) with ongoing gains in these mixes. - No specific numerical orderbook or pending orders details are disclosed in the excerpt.