United Parcel Service reported consolidated revenue of $21.2 billion and operating profit of $1.3 billion in the first quarter of 2026, surpassing internal targets. US average daily volume fell by 8% year-over-year, primarily due to the Amazon glide down and the shift away from lower-yield e-commerce shipments.

The company reaffirmed its $3 billion cost-out goal for the year, attributing progress to strategic measures such as a driver buyout program that reduced 7,500 positions and the closure of underutilized facilities. Transitional savings from aircraft lease adjustments and ground-saver outsourcing are also expected to ease Q2 costs.

Management highlighted a focus on premium segments—small and midsize business, B2B and healthcare—to drive margin expansion. Executives anticipate a margin inflection point in the back half of 2026, with more pronounced improvements projected in 2027.

The international division outperformed expectations in Q1 by targeting high-yield lanes and mitigating declines on the China-US route. However, network reconfiguration tied to Middle East tensions and forthcoming European de minimis regulation changes underpin a cautious outlook for Q2.