UPS completes Amazon business reduction and raises performance guidance, stock price still falls 6.4%
UPS's revenue in the second quarter was $22.8 billion, a year-on-year increase of 7.6%, with adjusted earnings per share of $1.76 exceeding expectations. The company has completed its strategy to reduce low-profit Amazon business and raised its full-year performance guidance. Despite strong financial performance, the stock price fell 6.4% in the late session due to market concerns over transformation costs and declining profits in international business
United Parcel Service (UPS) announced its second-quarter earnings report on Tuesday, showing that the company achieved growth in both revenue and profit through a strategic reduction of low-margin Amazon business, and raised its full-year performance guidance. However, due to market concerns about its profitability and future growth, the company's stock price still fell about 6.4% in late trading on Tuesday.
The earnings report showed that UPS's second-quarter revenue was $22.8 billion, a year-on-year increase of 7.6%, exceeding market expectations of $21.8 billion. Adjusted earnings per share were $1.76, far exceeding the expected $1.66. Net profit, however, dropped significantly from $1.28 billion in the same period last year to $604 million due to transformation-related costs.
The core of this performance lies in the company's successful strategic reduction of its Amazon business, with the CEO stating that the company "successfully completed the planned reduction in Amazon business volume as scheduled." Previously, the Amazon business accounted for more than 13% of the company's revenue, but as of the end of the first quarter, it had dropped to 8.8%. Although the average daily package volume in the U.S. declined by 3.3% as a result, domestic business revenue still grew by 6% to $14.9 billion by focusing on high-value customers such as small and medium-sized enterprises and improving automation levels, with operating profit increasing by 21%.
Based on the strong momentum in the first half of the year, the company raised its full-year revenue forecast for 2026 to approximately $91.2 billion, and adjusted its earnings per share guidance to about $7.22.
Nevertheless, the market remains concerned about the company's transformation costs and the decline in international business profits. The company recorded $891 million in after-tax transformation costs for the quarter, and operating profits from international business also declined. Additionally, some investors expressed doubts about the company's ability to maintain its current profit growth momentum
