UPS just dropped fourth-quarter earnings that beat Wall Street expectations, sending shares higher on Tuesday. The package delivery giant reported revenue of $24.5 billion, ahead of the $24 billion analysts were projecting, with adjusted earnings per share of $2.38 versus the expected $2.20.
The real story isn't just the earnings beat—it's what UPS is doing with its business. CEO Carol Tomé said that 2026 will be "an inflection point" in the company's transformation. UPS is deliberately moving away from low-margin work, especially with Amazon, to focus on higher-profit shipments. That strategy is already working: revenue per piece in its U.S. domestic segment jumped 8.3%, while international revenue per piece climbed 7.1%—meaning UPS is making more money on each package it delivers.
UPS forecasted $89.7 billion in revenue for 2026, exceeding analyst expectations, and announced it will cut up to 30,000 operational roles in 2026 as part of its turnaround plan. That might sound harsh, but it's part of a bigger efficiency push: automating more tasks, closing underperforming facilities, and leaning into what's actually profitable. The company also expects an adjusted operating margin of 9.6% for 2026, a key metric investors are watching closely.
For now, the market is eating this up. Investors seem convinced that UPS is making the right moves—and the stock's reaction today suggests they're ready to reward the company for executing on its transformation plan.