12:11 PM EDT, 04/28/2026 (MT Newswires) -- United Parcel Service ( UPS ) maintained its 2026 revenue outlook as the package delivery giant flagged a potential demand impact from the Middle East conflict.

The company continues to anticipate revenue of about $89.7 billion this year, while the consensus on FactSet is for $89.62 billion. UPS pegged the adjusted operating margin at about 9.6%.

"As we look to the balance of the year, there are a few external factors that we are watching that could impact demand, especially higher fuel costs stemming from the conflict in the Middle East and US consumer confidence, which is at historic lows," Chief Executive Carol Tome said during an earnings call, according to a FactSet transcript.

The company's stock was falling 4.3% in Tuesday trade.

The US-Israel war with Iran has disrupted shipments through the Strait of Hormuz. That conflict has boosted fuel costs, Chief Financial Officer Brian Dykes told analysts.

The hostilities paused following a ceasefire between the US and Iran and later between Israel and Lebanon, but there's no framework yet on reaching a long-lasting peace deal.

"Our fuel surcharges are linked to published fuel benchmarks and adjust with fuel prices on a weekly basis, and we expect these surcharges to provide coverage as fuel prices continue to fluctuate," Dykes said.

In the March quarter, UPS' revenue fell 1.6% year-on-year to $21.20 billion, compared with the Street's $20.98 billion forecast. Adjusted EPS declined to $1.07 from $1.49 a year ago, beating the average analyst estimate of $1.01.

US domestic package revenue fell to $14.13 billion from $14.46 billion in the prior-year period amid lower volume. International revenue rose 3.8% to $4.54 billion.

The company's expects revenue to grow by a low single digit in the second quarter, Dykes said on the call.

In January, UPS said it planned to slash its workforce by up to 30,000 positions related to a planned reduction in Amazon's (AMZN) deliveries in its network.

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