UPS has raised its full-year outlook, saying that it expects strong holiday delivery demand after posting better-than-expected third-quarter results.
The delivery giant on Oct. 27 said it now expects full-year revenue of about $92.6 billion and adjusted earnings of roughly $7.28 per share.
For the fourth quarter, UPS forecasts revenue of about $25.7 billion and adjusted operating profit of roughly $3.3 billion.
CEO Carol Tomé said the company expects average daily package volume to jump by about 25 percent from the third quarter to the fourth quarter as holiday shopping accelerates.
Even with that seasonal increase, U.S. package volume is expected to remain slightly below last year’s level because UPS has sharply reduced the amount of lower-margin business it handles for Amazon.
“As we head into peak, our network is more automated, more efficient, and better positioned than ever to handle the holiday surge,” Tomé said during the company’s earnings call.
UPS expects nearly 70 percent of its packages to move through automated processes by the end of the year.
Tomé said consumer spending remains uneven but should support holiday shipping demand.
“It’s a bit of a K-curve, for sure. If you have assets, you are spending. If you don’t, you are stretched,” she said.
“But as long as the employment rate stays fairly stable, and it appears to be fairly stable in our country, consumers are going to spend because they have assets.”
UPS Posts 3rd-Quarter Results
UPS’s more optimistic outlook followed stronger-than-expected third-quarter results.
Revenue rose by 6.7 percent from a year earlier to $22.9 billion in the quarter ended Sept. 30.
Net income totaled $1.16 billion, or $1.37 per share, compared with $1.31 billion, or $1.55 per share a year earlier.
The results showed that the strategy of focusing less on overall package volume and more on higher-margin shipments was paying off, company executives said.
UPS completed a plan earlier this year to reduce the number of packages it handles for Amazon by more than 50 percent from 2024 levels. Amazon was UPS’s largest customer, accounting for about 10.6 percent of its revenue in 2025.
The pullback helped drive down average daily U.S. volume by 3.3 percent from a year earlier in the third quarter, Chief Financial Officer Brian Dykes said in the Oct. 27 earnings call, yet U.S. domestic revenue rose by 4.5 percent to $14.9 billion as revenue per package increased by 6.1 percent.
The decline in volume has largely been offset by higher base rates, a more profitable mix of customers, and higher fuel surcharges, according to Dykes.
Small and medium-sized businesses were a particular area of growth. Their average daily volume increased by 3.7 percent, and they accounted for a record 35.1 percent of total U.S. volume.
“This is a deliberate shift,” Dykes told analysts. “We have been working toward more premium volume from industries and customers that deliver better overall economics.”
UPS has been shrinking its delivery network alongside the Amazon reduction, closing some parcel distribution centers and hiring fewer workers in favor of automation.
The company said those restructuring efforts saved about $1.8 billion during the first nine months of 2026. It expects nearly $3 billion in savings for the full year.
The changes could also reduce the cost of handling the holiday surge.
“We are renting less trailers. We are leasing less aircraft,” Dykes said. “While we are hiring, we are not having to hire and train as many people in such a short time period.”
