UPS Raises Outlook After Shedding Low-Margin Amazon Packages

UPS has raised its 2026 revenue forecast to about $91.2 billion, up from a prior forecast of $89.7 billion, after shedding low-margin Amazon packages. The company reported second-quarter adjusted earnings of $1.76 per share, exceeding analyst estimates. The stronger outlook reflects higher-margin business and pricing gains, as UPS shifts toward healthcare, international, and small-business shipments. The company is betting on a leaner delivery network, stable pricing, and a more profitable mix of business to strengthen its operations, despite demand remaining tepid. UPS is focusing on fewer parcels that yield higher margins, including complex healthcare shipments, international packages, and those for small-and-medium sized businesses. However, competition in the parcel world is ramping up, with Amazon making announcements about opening its logistics network to third-party shippers, which investors see as a threat to legacy carriers. UPS and rival FedEx Corp. argue that alternative carriers are built for e-commerce parcels that they have pulled away from. The company is also facing rising labor costs tied to the end of its current labor agreement with the Teamsters union, followed by new negotiations.