UPS shares drop 3.6% despite Q1 profit beat due to weak US package volumes

UPS reported Q1 2026 revenue of $21.2 billion and adjusted EPS of $1.07, beating estimates. However, US domestic revenue fell 2.3% amid weak package volumes, pressuring sentiment and causing shares to drop 3.6%. International and supply chain segments showed mixed results, with international revenue up 3.8% but supply chain revenue down 6.5%. UPS expects growth and margin expansion in Q2 and reaffirmed full-year guidance for $89.7 billion revenue and 9.6% adjusted operating margin.