UPS Raises 2026 Outlook as AI, Healthcare Drive Post-Amazon Growth Strategy

United Parcel Service (UPS) raised its full-year 2026 guidance after reporting stronger second-quarter results, marking what CEO Carol Tomé described as the completion of the company's 18-month effort to reduce lower-margin Amazon business and reposition its network for higher-value growth.

The logistics company reported second-quarter revenue of $22.8 billion, while non-GAAP adjusted operating profit rose to $2.1 billion and adjusted diluted earnings per share reached $1.76. UPS also raised its full-year revenue outlook to approximately $91.2 billion, increased its adjusted operating profit target to $8.65 billion, and lifted adjusted EPS guidance to approximately $7.22.

Tomé said the company completed its planned reduction in Amazon shipments while maintaining service quality.

"We eliminated approximately two million pieces per day of lower-quality Amazon volume. We reconfigured and further automated our U.S. network for higher return opportunities," Tomé said during the earnings call.

She added that UPS removed approximately $4.5 billion in related costs through the restructuring and now has "a leaner, more automated, more agile network" capable of delivering stronger operating leverage as shipment volumes grow.

AI and automation become the next phase

With the Amazon transition complete, UPS is placing greater emphasis on artificial intelligence, RFID technology, healthcare logistics, and premium business customers. The strategy builds on the company's broader investment in AI-powered logistics infrastructure.

During the earnings call, Tomé described RFID as the "eyes and ears" of the logistics network and AI as its "brain." UPS has deployed RFID sensing technology across all U.S. delivery facilities and package cars and is now expanding the rollout internationally.

According to the company, RFID-generated data feeds an AI-powered digital twin of its network, enabling real-time optimization of routing, forecasting, facility planning, and package movement while improving shipment visibility.

Management also disclosed that 68.5% of U.S. package volume now flows through automated facilities, up from 64% a year ago. CEO Carol Tomé said automated buildings operate at roughly 28% lower cost per package than conventional facilities, contributing to productivity improvements.

The focus on operational AI follows a strategy where the company has prioritized efficiency gains before pursuing AI-driven revenue growth.

Healthcare logistics takes a larger role

Healthcare continued to emerge as one of UPS's fastest-growing businesses during the quarter.

The company generated more than $3 billion in healthcare revenue for the second consecutive quarter and announced the addition of 27 temperature-controlled cross-dock facilities to strengthen its global cold-chain network.

Tomé said the facilities are designed to move temperature-sensitive healthcare products quickly between air and ground transportation while maintaining strict environmental controls.

UPS also announced the expansion of North American air freight services between the U.S. and Mexico and launched a dedicated team of more than 300 specialists focused on automotive and industrial manufacturing supply chains.

Beyond healthcare, management said small and medium-sized business volumes increased 4.3% year over year, while Digital Access Program revenue exceeded $1 billion for the third consecutive quarter, reflecting continued demand for the company's digital shipping services.

Reuters reported that the raised outlook follows the successful completion of UPS's Amazon restructuring, with the company now emphasizing higher-margin sectors such as healthcare, small businesses, and premium logistics services instead of pursuing parcel volume alone.