Why UPS Stock Just Dropped
Key Points
UPS beat on sales and beat on earnings this morning -- then its stock fell.
Despite the beat, UPS earnings fell steeply year over year.
- 10 stocks we like better than United Parcel Service ›
United Parcel Service (NYSE: UPS) stock fell 4.2% through 11 a.m. ET this morning, despite beating analyst forecasts in its Q1 report this morning.
Heading into the report, analysts expected UPS to earn $1.03 per share on $21 billion in quarterly sales. In fact, UPS earned $1.07 per share, adjusted for one-time items, on sales of $21.2 billion.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Image source: Getty Images.
UPS Q1 earnings
Not all the news was good. U.S. and supply chain revenue both declined year over year, by 3% and 6%, respectively, with only international revenues rising (about 4%). Total revenue slipped 1%.
Earnings per share took a bigger hit. Although UPS beat pro forma estimates, earnings calculated under generally accepted accounting principles (GAAP) were a nickel under non-GAAP earnings -- $1.02 per share -- and that was down more than 27% year over year!
CEO Carol Tomé pooh-poohed the decline, however, arguing that while the results might not be pretty, "the first quarter of 2026 marked a critical transition period for UPS ... [which is now] behind us." Going forward, UPS expects to resume growing.
What's next for UPS?
It even expects to grow a bit faster than Wall Street is looking for. Turning to guidance, UPS forecasts $89.7 billion in sales this year, up 1% from 2025 sales. Management did not provide GAAP earnings guidance, but said its full-year "adjusted operating margin" should be 9.6% -- a sizable improvement from the 6.1% margin recorded in Q1.
If UPS hits those marks, it should meet or beat analyst forecasts for a $7.05-per-share GAAP profit this year. On a $104 stock, that works out to a forward P/E ratio of less than 15. For a turnaround that's growing sales again, expanding margins, and paying a 6.1% dividend yield, that sounds pretty cheap to me.
Should you buy stock in United Parcel Service right now?
Before you buy stock in United Parcel Service, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and United Parcel Service wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $492,752!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,327,935!*
Now, it’s worth noting Stock Advisor’s total average return is 991% — a market-crushing outperformance compared to 201% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of April 28, 2026.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends United Parcel Service. The Motley Fool has a disclosure policy.
Recommended Articles
