United Parcel Service Inc. (UPS) reported first-quarter adjusted earnings of $1.42 per share Wednesday, a four-cent miss versus the $1.46 consensus, on revenue of $21.1 billion that fell 1.4% year-on-year. The pressure point was a steeper-than-expected reduction to full-year 2026 revenue guidance, now in the $89 billion-$91 billion range from the prior $93 billion-$95 billion, sending shares down 8% in pre-market trade to $94.20.
CEO Carol Tomé attributed the cut to "a sharper-than-anticipated softening of U.S. e-commerce volumes through March and April, combined with the accelerated impact of our network rationalization." UPS announced the closure of 18 additional sorting facilities in 2026, on top of 11 closed in 2025, with management projecting $700 million-$900 million of annualized savings by year-end 2027.
Amazon Decoupling Update
The strategic decoupling from Amazon — first announced January 2025 — proceeded faster than expected. Amazon-related average daily volume declined 41% year-on-year in Q1, ahead of the 35% planned reduction. UPS now expects total Amazon volumes to be 60% lower by Q4 2026 versus Q4 2024 levels. The exit has been margin-accretive: domestic-package operating margin expanded to 8.7% from 7.9% despite the volume drop.
International package revenue grew 2.1% on strong Asia-Pacific outbound volumes, while supply-chain solutions (which includes the recently sold Coyote Logistics business) declined 14% on a like-for-like basis. The healthcare-logistics business, viewed by management as the firm's long-term growth engine, expanded 11% to $2.3 billion in Q1 revenue.
Logistics Peers Weigh
FedEx (FDX) opened down 4.2% in pre-market trade in sympathy, while XPO