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UPS forecasts weak 2025 revenue as it pares Amazon exposure, shares fall
(Reuters) -United Parcel Service on Thursday forecast 2025 revenue below expectations as the parcel delivery giant works to lower exposure to its largest customer, Amazon, and as other customers opt for cheaper, slower ground-based deliveries.
UPS’ shares fell 5% before the bell after the company said it had reached an agreement with Amazon — without naming the firm but referring to it as its largest customer — to cut volumes it transports with UPS by more than 50% by the second half of next year.
The move comes as Amazon has also been reducing its dependence on UPS as the e-commerce company continues to expand its own delivery network.
UPS forecast 2025 revenue of $89 billion, compared with the average analyst estimate of $94.88 billion, according to data compiled by LSEG.
It also forecast full-year revenue of $89 billion, compared with estimates of $94.88 billion.
UPS and rival FedEx have been cutting costs since customers switched to slower, cheaper deliveries in the wake of the early pandemic’s e-commerce boom.
Atlanta-based UPS also forecast full-year consolidated operating margin at 10.8%, an increase from the 9.8% it reported for 2024.
The company reported fourth-quarter revenue of $25.3 billion, missing estimates of $25.42 billion.
UPS reported an adjusted profit of $2.75 per share for the quarter ended Dec. 31, beating estimates of $2.53 per share.
(Reporting by Abhinav Parmar in Bengaluru and Lisa Baertlein in Los Angeles; Editing by Savio D’Souza, Arun Koyyur and Shounak Dasgupta)
UPS, one of the largest package delivery companies in the world, recently announced its forecast for weak revenue in 2025 as it scales back its exposure to e-commerce giant Amazon. This decision has caused shares of UPS to fall as investors react to the news.
The company has been a key partner for Amazon in handling its massive volume of packages, but UPS has been looking to diversify its customer base and reduce its reliance on any single client. This strategic shift has led to a decrease in projected revenue for the upcoming year.
Investors are closely watching how UPS will navigate these changes and whether it will be able to find new growth opportunities to offset the loss of Amazon’s business. The company’s stock price has taken a hit in response to the news, as shareholders weigh the potential impact on UPS’s financial performance.
It remains to be seen how UPS will adapt to this new landscape and whether it will be able to maintain its position as a leader in the logistics industry. As the company continues to evolve its business strategy, investors will be monitoring its progress closely to see how it will fare in the coming years.
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