UPS (UPS) official guidance

Looking at the third quarter, we expect average daily volume to decline mid-single digits, reflecting a seasonal decline as well as the impact of this year's Amazon glide down, which completed in June.

As we build our financial plan that supports the guidance that we just gave, we expect the volume sequentially in the United States to lift about 24% from Q3-Q4, much like it did last year.

For the full year 2026, capital expenditures are still expected to be about $3 billion, and we plan to complete our pension contribution of $1.3 billion.

As a result, we still expect to deliver approximately $3 billion in related benefits in 2026.

Lastly, we are still planning to pay out around $5.4 billion in dividends in 2026, subject to board approval.

Based on our year-to-date results, today, we are raising our full year 2026 consolidated revenue outlook to approximately $91.2 billion. We are raising our consolidated operating profit expectation to approximately $8.65 billion and lifting our diluted earnings per share guidance to approximately $7.22.

We expect free cash flow to be approximately $5.5 billion, which includes the payments for the Driver Choice Program I mentioned earlier.

Based on our year-to-date results, today, we are raising our full year 2026 consolidated revenue outlook to approximately $91.2 billion. We are raising our consolidated operating profit expectation to approximately $8.65 billion and lifting our diluted earnings per share guidance to approximately $7.22.

Operating margin in the international segment is expected to be in the mid-teens.

We expect the operating margin to be between 13%-14%.

We expect full year operating margin to be between 10%-11%.

In the third quarter, we expect Supply Chain Solutions revenue growth in the low double digits year-over-year and operating margin between 10%-11%.

Starting with U.S. Domestic, we expect full year 2026 revenue of approximately $60 billion, up 1% year-over-year, and an operating margin of approximately 7.5%.

Lastly, in the back half of the year, we expect a U.S. Domestic operating margin of approximately 8.8%, reflecting year-over-year margin expansion in both the third and fourth quarters.

We expect revenue to be approximately flat year-over-year and a third quarter operating margin of approximately 7%.

For the full year 2026, capital expenditures are still expected to be about $3 billion, and we plan to complete our pension contribution of $1.3 billion.

Starting with U.S. Domestic, we expect full year 2026 revenue of approximately $60 billion, up 1% year-over-year, and an operating margin of approximately 7.5%.

Based on our year-to-date results, today, we are raising our full year 2026 consolidated revenue outlook to approximately $91.2 billion.

Turning to the international segment and starting with the full year, we anticipate revenue growth in the mid-single digits year-over-year, driven by strong revenue per piece growth.

We expect a similar performance in the third quarter, with revenue up mid-single digits driven by strong revenue per piece.

Lastly, in Supply Chain Solutions, we expect full year 2026 revenue growth in the high single digits, driven by growth in forwarding and healthcare logistics.

In the third quarter, we expect Supply Chain Solutions revenue growth in the low double digits year-over-year and operating margin between 10%-11%.

We expect revenue to be approximately flat year-over-year and a third quarter operating margin of approximately 7%.

The effective tax rate is still expected to be approximately 23.0%.

As a part of these initiatives, we expect non-GAAP adjusted operating expense to exclude between $1.3 and $1.5 billion in cost during the full year 2026, primarily related to employee separation costs and third-party consulting fees, of which $1.1 billion is related to the Driver Choice Program.

We expect ADV to be down mid-single digits year-over-year due to our actions with Amazon, which will be offset by a strong revenue per piece growth rate in the mid-single digits.

We are planning to close an additional 27 buildings this year, most of which will be closed in the second quarter.

We are pleased with the progress that we are making on our Amazon glide down and network reconfiguration initiative and are on track to achieve our targeted $3 billion in savings in 2026.

The Driver Choice Program that we initiated during the quarter is expected to reduce full-time driver positions by approximately 7,500 over time, putting us firmly on target to reach our reduction goal of 30,000 operational positions this year.

The Driver Choice Program that we initiated during the quarter is expected to reduce full-time driver positions by approximately 7,500 over time, putting us firmly on target to reach our reduction goal of 30,000 operational positions this year.

Looking specifically at International in the second quarter, we will lap tough comparisons from changes in trade policy, benefit from normal seasonal uplift, and continue to realize savings from our air network cost actions. As a result, we expect low single-digit revenue growth and an operating margin between 13% and 14%.

Looking at the second quarter, we expect momentum from the first quarter to continue, and we expect revenue in SCS to be up low single digits year-over-year and operating margin between 9.5% and 10.5%.

Today, we are reaffirming 2026 consolidated financial goals. For the year, we expect to generate consolidated revenue of approximately $89.7 billion and a consolidated operating margin of approximately 9.6%.

Looking at the second quarter of this year compared to the first quarter, the USPS transition has been completed. The Amazon glide down and network reconfiguration will wrap up by the end of June. We are leasing fewer replacement aircraft as 767 deliveries continue, and premium volume is expected to further improve mix. As a result, we expect revenue to be up low single digits and operating margin to be between 7.5% and 8.5%.

Starting with variable cost, total operational hours paced down with volume in the first quarter, and we're on track to reach our 2026 reduction target of 25 million hours versus last year.

Looking specifically at International in the second quarter, we will lap tough comparisons from changes in trade policy, benefit from normal seasonal uplift, and continue to realize savings from our air network cost actions. As a result, we expect low single-digit revenue growth and an operating margin between 13% and 14%.

Looking at the second quarter, we expect momentum from the first quarter to continue, and we expect revenue in SCS to be up low single digits year-over-year and operating margin between 9.5% and 10.5%.

Looking at U.S. Domestic, full year 2026 revenue is still expected to be approximately flat year-over-year.

Looking at the second quarter of this year compared to the first quarter, the USPS transition has been completed. The Amazon glide down and network reconfiguration will wrap up by the end of June. We are leasing fewer replacement aircraft as 767 deliveries continue, and premium volume is expected to further improve mix. As a result, we expect revenue to be up low single digits and operating margin to be between 7.5% and 8.5%.

We expect ADV to be down mid-single digits year-over-year due to our actions with Amazon, which will be offset by a strong revenue per piece growth rate in the mid-single digits.

With that behind us, we expect to return to consolidated revenue and operating profit growth, and adjusted operating margin expansion in the second quarter of this year.

With that behind us, we expect to return to consolidated revenue and operating profit growth, and adjusted operating margin expansion in the second quarter of this year.

Over the next 15 months, we expect to take delivery of 18 new Boeing 767 aircraft, with 15 expected to deliver this year.

Over the next 15 months, we expect to take delivery of 18 new Boeing 767 aircraft, with 15 expected to deliver this year.

Looking at the first quarter, we expect revenue to be approximately flat, with a year-over-year decline in operating profit due to changes in trade lanes and tough comps from the front running of tariff and de minimis changes in 2025.

In the second half of the year, we expect high single-digit operating profit growth, reflecting the completion of our strategic actions.

Looking at the first quarter of 2026, we expect to generate an operating margin in the mid-single digits.

For modeling purposes, in total below the line, we expect approximately $760 million in expense, which includes pension income of approximately $250 million, and we expect the tax rate for the full year to be approximately 23%.

Looking at the first quarter, we expect revenue to be approximately flat, with a year-over-year decline in operating profit due to changes in trade lanes and tough comps from the front running of tariff and de minimis changes in 2025.

But you're going to be higher than that in the first half and then normalize to about 3% in the second half, right?

But you're going to be higher than that in the first half and then normalize to about 3% in the second half, right?

Looking at capital allocation for the full year, we expect capital expenditures to be approximately $3.5 billion.

Following the completion of our acquisition of Andlauer Healthcare Group, we expect to end the year with around $5 billion in cash.

In conjunction with our actions to significantly reduce the amount of Amazon volume in our network, we are executing the largest network reconfiguration in our history and will remove approximately $3.5 billion in related costs this year.

We are planning to pay out around $5.5 billion in dividends subject to board approval

Lastly, we expect the tax rate to be approximately 23.75% for the full year 2025.

There were some timing issues in our Q2 versus Q3 that worked themselves out and we expect Q4 to look similar to Q3.

With this in mind, we expect fourth quarter revenue to be approximately $5 billion, and we expect an operating margin of between 17% and 18%.

In Supply Chain Solutions, we expect revenue in the fourth quarter of around $2.7 billion and an operating margin of approximately 9%.

So far this year, we are down more than 16 million hours, and we are on track to reach our reduction target of approximately 25 million hours for the year.

In the second quarter, we laid out a range of $400 million, $650 million associated with the total network reconfiguration efficiency reimagined program. We're still within that range.

DAP continues to be an important SMB growth engine, and for the full year we expect to deliver over $3.5 billion in global DAP revenue.

With this in mind, we expect fourth quarter revenue to be approximately $5 billion, and we expect an operating margin of between 17% and 18%.

In Supply Chain Solutions, we expect revenue in the fourth quarter of around $2.7 billion and an operating margin of approximately 9%.

As I wrap up, let me share our financial expectations for the fourth quarter. We anticipate consolidated revenue of approximately $24 billion and consolidated operating margin of approximately 11.5%.

Brian, on your point on rev per piece, look, we continue to see strong base rate improvement in rev per piece. We expect the fourth quarter to be a little bit above 6%.

For the fourth-quarter of 2025, on a consolidated basis, UPS expects revenue to be approximately $24.0 billion and non-GAAP adjusted operating margin of approximately 11.0% - 11.5%.

In connection with the Network Reconfiguration and Efficiency Reimagined programs described above, we expect to exclude between $400 and $650 million in non-GAAP adjusted expense during 2025, related primarily to third-party consulting fees, employee separation benefits, and certain programmatic expenses.

•$1.4 billion in pension contributions (of which $1.3 billion have been made)