research report · UPS

United Parcel Service Inc

Johannes Vermeer, Woman Holding a Balance, c. 1664, detail · National Gallery of Art

Viridis’s deep research report, written Nov 4, 2026 from its quarterly report (10-Q for the quarter ended Sep 30, 2026, filed Nov 4, 2026). Written and checked with Anthropic’s Claude models.

your email, no card; what you get

business trajectory

Improving

better on balance: sales, margins, cash or competitive position

financial resilience

Adequate

funded for about two years, partly by routine borrowing or new issuance

Judgments of the business from its filings, not of its shares: no valuation, no advice.

bottom line

UPS's U.S. network has started to earn more on fewer packages, but the improvement in the third quarter of 2026 is narrower than the headline suggests, and the larger step is still a forecast. U.S. Domestic adjusted operating profit rose 14.3% to $1,034M. Consolidated adjusted operating profit fell to $2,054M from $2,132M, and once asset-sale gains are stripped from both years, my estimate has profit growing only about as fast as revenue. The raised outlook needs roughly $3.3B of fourth-quarter adjusted operating profit. In 2026, cash covers the roughly $5.4B dividend only with help from one-off items.

what changed this quarter

  • Revenue was $22,853M, up 6.7%. GAAP operating profit was $1,744M against $1,804M, and diluted EPS was $1.37 against $1.55.
  • Adjusted EPS was $1.69 against $1.74. The year-ago figure included a $330M pre-tax sale-leaseback gain worth $0.30 a share.
  • UPS took a $182M goodwill impairment in the Healthcare Logistics and Distribution unit within Supply Chain Solutions (SCS).
  • The full-year outlook was raised to about $92.6B of revenue, $8.75B of adjusted operating profit, $7.28 of adjusted EPS and $6.1B of adjusted free cash flow. Capital spending of about $3.0B and dividends of about $5.4B were confirmed. The release does not give the prior figures.
  • In August, UPS issued $1.0B of 4.850% notes due 2031, of which $450M was contributed to its pension plans, and $325M of floating-rate notes due 2076. UPS announced it will evolve into a new global operating model, and Kate Gutmann retired from her role effective September 1.

in the full report

Its findings, each with the evidence, the strongest counterpoint and what would prove it wrong:

  • The U.S. margin turn is real but thin, and asset sales help carry it
  • Without asset-sale gains, profit grew about with revenue; the margin step is a fourth-quarter promise
  • Healthcare, the main acquired growth bet, is under valuation strain
  • 2026 free cash flow is flattered by one-off items

Then its finances, the quality of its earnings, its management, the case for and against, and what to watch, its claims cited to the filings and checked against them.

read it whole

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