United Parcel Service, Inc. (UPS) wrapped up 2025 with a solid fourth quarter that had Wall Street nodding in approval. The delivery giant posted revenue of $24.5 billion and operating profit of $2.6 billion, with non-GAAP adjusted operating profit coming in at $2.9 billion.

Shares climbed in premarket trading Tuesday after the company not only beat expectations but also laid out an encouraging roadmap for 2026. The stock was up 2.70% at $109.86 before the opening bell.

Breaking Down the Numbers

UPS delivered adjusted earnings per share of $2.38, comfortably ahead of the $2.20 analyst consensus. On a GAAP basis, diluted EPS hit $2.10. Revenue of $24.5 billion beat the $24.0 billion estimate handily. The company acknowledged it "outperformed our financial expectations in the fourth quarter."

The GAAP results included some notable one-time hits totaling $238 million, or 28 cents per share. The biggest chunk was a $137 million after-tax charge to write off the MD-11 aircraft fleet, which UPS retired ahead of schedule during the quarter as part of its fleet modernization push. Another $101 million came from transformation charges as the company reshapes its operations.

On the shareholder return front, UPS declared a Q1 2026 dividend of $1.64 per share, payable March 5 to shareholders of record on February 17. For the full year 2025, the company returned $6.4 billion to investors through dividends and share buybacks.

How the Business Segments Performed

The U.S. Domestic segment pulled in $16.8 billion in revenue, down from $17.3 billion a year earlier. Revenue dropped 3.2%, which UPS attributed to an expected volume decline—the Amazon glide-down in action. But here's the interesting part: revenue per piece jumped 8.3%, showing the company's strategy of prioritizing profitable volume over sheer package count. Operating margin was 8.5%, or 10.2% on an adjusted basis.

International operations told a brighter story, with revenue climbing to $5.0 billion from $4.9 billion. Revenue per piece increased 7.1%, and operating margin hit a healthy 17.5%, or 18.0% adjusted.

Supply Chain Solutions had the roughest quarter, with revenue falling to $2.7 billion from $3.1 billion. The 12.7% decline came primarily from volume drops in the Mail Innovations business. Operating margin was 9.8%, or 10.3% adjusted.

The Full-Year Picture

For all of 2025, UPS reported revenue of $88.7 billion, operating profit of $7.9 billion, and adjusted operating profit of $8.7 billion. Operating margin was 8.9%, while adjusted operating margin reached 9.8%.

GAAP earnings per share totaled $6.56, with adjusted EPS of $7.16. The company generated $8.5 billion in cash from operations and $5.5 billion in adjusted free cash flow.

CEO Carol Tomé framed the year as one of strategic repositioning: "2025 was a year of considerable progress for UPS as we took action to strengthen our revenue quality and build a more agile network. Looking ahead, upon completion of the Amazon glide-down, 2026 will be an inflection point in the execution of our strategy to deliver growth and sustained margin expansion."

Looking Ahead to 2026

UPS is forecasting 2026 revenue of approximately $89.7 billion, which beats the $87.9 billion analyst estimate. The company expects adjusted operating margin around 9.6%.

Capital expenditures are planned at about $3.0 billion, with dividend payments expected around $5.4 billion subject to board approval. The company is working with an effective tax rate of approximately 23.0%.

In its forward-looking statements, UPS flagged potential headwinds including "new or increased tariffs" and "increasingly stringent regulations related to climate change," among other risk factors that could impact operations.