UPS retires MD-11 fleet as transformation charges curb Q4 profit

United Parcel Service (NYSE:UPS) reported fourth-quarter 2025 results on Tuesday that highlighted the financial costs of a massive network overhaul.

The Atlanta-based delivery giant posted consolidated revenues of $24.5 billion, falling short of the $25.3 billion recorded in the same period a year ago, as the company continues to navigate a "glide-down" in volume from its largest customer, Amazon, and shifting global trade patterns.

The quarter’s bottom line was notably impacted by $238 million in total charges, including a $137 million non-cash write-off related to the permanent retirement of its McDonnell Douglas MD-11 aircraft fleet.

The decision to ground the tri-jets—which once formed nearly 10% of the UPS airline—was accelerated following safety concerns and a recommendation from Boeing late in 2025.

By completing the retirement in the fourth quarter, UPS is betting on a more agile, fuel-efficient fleet of Boeing 747-8s and 767s to drive future margins.

Operating profit for the quarter stood at $2.6 billion on a GAAP basis, while adjusted consolidated operating profit reached $2.9 billion.

Diluted earnings per share were $2.10, but climbed to $2.38 when adjusted for the aircraft write-off and $101 million in after-tax transformation charges.

These "transformation" costs are part of CEO Carol Tomé’s "Better, Not Bigger" strategy, which has involved closing dozens of older, manual sorting facilities in favor of high-tech automated hubs.