📉 Amazon Cuts Ahead
UPS is reducing its Amazon deliveries by over 50% by late 2025. This move surprised analysts, as Amazon made up 11.8% of UPS's revenue in 2023. The company hopes this shift will improve profit margins, despite lowering overall revenue.
📊 Revenue Forecast Drops
UPS projects 2025 revenue at $89B, missing the $94.88B analyst estimate. Q4 revenue was $25.3B, falling short of $25.42B expectations. However, adjusted earnings beat estimates at $2.75 per share, versus $2.53 forecasted.
🔄 Strategic Shift
CEO Carol Tome says the company is becoming "more profitable, agile, and differentiated." UPS is reconfiguring its U.S. network and launching cost-saving initiatives. These changes aim to save about $1B and improve operational efficiency.
📦 Margin Improvement
UPS expects a 2025 operating margin of 10.8%, up from 9.8% in 2024. Reducing Amazon's low-margin shipments should raise revenue per package. The company is also dealing with competition from Temu and Shein’s budget-friendly deliveries.
Will cutting Amazon deliveries make UPS more profitable?
