Group 1: Market Sentiment and Economic Outlook - The S&P 500 index is perceived to have peaked this year, with 93% of investors expecting it to remain below 6000 points in the next 12 months, and 40% predicting it will stay between 5000-5500 points [1] - Concerns about trade wars and tariffs are leading to expectations of economic stagnation, with 61% of investors anticipating stagflation in the U.S. economy over the next year [1][2] - The Trump administration's tariff policies are projected to reduce U.S. GDP growth expectations to 0.5% by 2025, with tariffs causing production costs to rise by 5%-15% for companies reliant on imported materials [2] Group 2: Technology Sector Insights - Despite overall market pessimism, 41% of investors remain optimistic about the "Mag-7/GenAI theme," indicating a willingness to invest in technology giants [1] - Alibaba's Qwen3 series models have been released, showcasing significant advancements in AI capabilities and a reduction in deployment costs, making it competitive against top models like OpenAI's [3][4] - The technology sector, particularly AI, is expected to continue attracting investment, with a focus on the performance and strategic developments of major players [4][10] Group 3: Corporate Performance and Strategic Challenges - Apple's upcoming earnings report is anticipated to slightly exceed market expectations, but investors are more focused on strategic issues such as tariff risks and AI strategy [5][6] - BP reported a 49% decline in first-quarter profits, attributed to weak oil prices, while the CEO remains optimistic about the company's strategic adjustments [7][8] - UPS is exploring the deployment of humanoid robots in its logistics network, reflecting a strong interest in automation within the logistics industry [9][10]

Market Performance - The three major U.S. indices rose, with the Dow Jones and S&P 500 increasing for the sixth consecutive day, closing at 40,527.62 points (up 0.75%) and 5,560.83 points (up 0.58%) respectively [1] - European markets showed mixed results, with Germany's DAX30 up 0.72% and France's CAC40 down 0.24% [1] Economic Indicators - The U.S. consumer confidence index fell to 86.0, the lowest level since May 2020, reflecting growing concerns over tariffs and economic outlook [4] - Job vacancies in the U.S. dropped to the lowest level since September of the previous year, indicating weakened labor demand amid economic uncertainty [5] Corporate Developments - UPS announced a significant layoff of approximately 20,000 employees, marking it as the first major U.S. company to implement large-scale layoffs due to the impact of tariff-related trade slowdowns [9] - Adidas' CEO expressed that U.S. tariff policies are creating uncertainty, affecting the company's ability to adjust revenue and profit forecasts [10] - Walmart decided against disclosing tariff-related costs on product pricing to avoid aggravating the Trump administration, while striving to keep product prices low [10][11] Industry Investments - The U.S. battery industry plans to invest $100 billion over the next decade to establish a fully domestic supply chain, which is expected to create 350,000 jobs [6]

Core Viewpoint - United Parcel Service, Inc. (UPS) reported first-quarter 2025 earnings of $1.49 per share, exceeding the Zacks Consensus Estimate of $1.44 and showing a year-over-year increase of 4.2% [1] - Revenues for the quarter were $21.5 billion, surpassing the Zacks Consensus Estimate of $21.1 billion but reflecting a 0.7% decline year over year [1] Financial Performance - U.S. Domestic Package revenues reached $14.46 billion, a 1.4% year-over-year increase, driven by air cargo growth and a 4.5% rise in revenue per piece, despite a decline in volume [3] - The segment's operating profit (adjusted) grew 19.3% year over year to $1.01 billion, with an adjusted operating margin of 7% [3] - International Package division revenues totaled $4.37 billion, up 2.7% year over year, supported by a 7.1% increase in average daily volume, although adjusted operating profit fell 4.1% to $654 million, with a 15% operating margin [4] - Supply Chain Solutions revenues decreased 14.8% year over year to $2.71 billion due to the divestiture of Coyote, with adjusted operating profit down 55% to $98 million and an adjusted operating margin of 3.6% [5] - The overall adjusted operating margin for UPS was 8.2% [5] Strategic Outlook - CEO Carol Tomé emphasized the company's commitment to leveraging its integrated network and trade expertise to navigate the dynamic trade environment, while also focusing on cost reduction and network reconfiguration [2] - UPS is not providing updates to its previously issued consolidated full-year outlook due to macroeconomic uncertainties [6] Industry Context - UPS holds a Zacks Rank of 3 (Hold), indicating a neutral outlook in the current market [8] - The company is positioned to benefit from increased e-commerce, automation, and outsourcing trends, which may enhance its performance [7]

Financial Performance - Revenue decreased slightly by 0.7% Y/Y, from $21706 million in 1Q24 to $21546 million in 1Q25[21, 32] - Non-GAAP adjusted operating profit increased by 0.9% Y/Y, from $1747 million in 1Q24 to $1763 million in 1Q25[21, 32] - Non-GAAP adjusted operating margin increased by 20 bps Y/Y, from 8.0% in 1Q24 to 8.2% in 1Q25[21, 32] - Non-GAAP adjusted diluted EPS increased by 4.2% Y/Y, from $1.43 in 1Q24 to $1.49 in 1Q25[21, 32] Segment Performance - U S Domestic revenue increased by 1.4% Y/Y, from $14300 million in 1Q24 to $14500 million in 1Q25[39, 41] - U S Domestic non-GAAP adjusted operating profit increased by 19.4% Y/Y, from $0.8 billion in 1Q24 to $1.0 billion in 1Q25[21, 40, 41] - International revenue increased by 2.7% Y/Y, from $4300 million in 1Q24 to $4400 million in 1Q25[44] - International non-GAAP adjusted operating profit decreased by 4.1% Y/Y, from $0.7 billion in 1Q24 to $0.7 billion in 1Q25[44] - Supply Chain Solutions revenue decreased by 14.8% Y/Y, from $3200 million in 1Q24 to $2700 million in 1Q25, impacted by a $563 million reduction in revenue from Coyote[45] - Supply Chain Solutions non-GAAP adjusted operating profit decreased by 55.0% Y/Y, from $218 million in 1Q24 to $98 million in 1Q25[45] Strategic Initiatives and Outlook - The company expects to deliver approximately $1 billion in savings from "Efficiency Reimagined"[24] - The company plans $3.5 billion in cost reductions in 2025[47, 50] - The company is not providing updates to the previously issued full-year consolidated outlook due to market uncertainty[30, 52] - The company expects U S Domestic average daily volume to be down approximately 9.0% Y/Y in 2Q25[53]

Financial Data and Key Metrics Changes - Consolidated revenue for Q1 2025 was $21.5 billion, a decrease of 0.7% year-over-year, aligning with expectations [7][30] - Consolidated operating profit increased by 0.9% to $1.8 billion, with an operating margin of 8.2%, up 20 basis points from the previous year [7][30] - Diluted earnings per share rose by 4.2% to $1.49 [7][30] Business Line Data and Key Metrics Changes - U.S. Domestic segment operating profit increased by $164 million year-over-year, with an operating margin expansion of 110 basis points [8] - Total U.S. average daily volume (ADV) decreased by 3.5%, with ground ADV down 2.5% and air ADV down 9.6% [32] - International segment ADV increased by 7.1%, with export ADV growing by 9.3% year-over-year [38][39] Market Data and Key Metrics Changes - SMBs accounted for 31.2% of total U.S. volume, the highest concentration in ten years, driving changes in overall volume and revenue quality [34][19] - U.S. import volume is approximately 400,000 pieces per day, representing less than 2% of total global ADV [21] - Revenue from China to U.S. trade lanes represented 11% of total international revenue, with other trade lanes to the U.S. accounting for 17% [21] Company Strategy and Development Direction - The company is executing a significant network reconfiguration, including 164 operational closures, to optimize capacity and reduce dependency on labor [14][43] - The strategic focus includes improving revenue quality and expanding in healthcare, international, B2B, and SMB markets [18] - The company aims to achieve $1 billion in savings through the Efficiency Reimagined initiative, which targets process improvements and cost reductions [17][43] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the uncertain market, emphasizing the agility of their integrated network [28] - The company is not providing updates to the full-year outlook due to market uncertainties but is focused on executing strategic and financial goals [27][50] - Management highlighted the importance of modeling different scenarios to adapt to rapid shifts in business conditions [26][50] Other Important Information - The company plans to close 73 buildings by June 2025 as part of its network reconfiguration [43][48] - The first quarter saw $2.3 billion in cash from operations and $1.5 billion in free cash flow [42] - The company is leveraging next-gen brokerage technology to assist customers in navigating tariff changes [25] Q&A Session Summary Question: Cost savings from the $3.5 billion target - Approximately $500 million of the $3.5 billion cost savings was realized in Q1, with expectations for ramp-up in subsequent quarters [60][78] Question: Automation and efficiency initiatives - The company is exploring automation in various operations, aiming for significant cost savings and reduced labor dependency [70][74] Question: Impact of tariffs on SMBs - SMBs are facing challenges due to tariffs, with many being single-sourced from China, leading to uncertainty in the marketplace [80][81] Question: International volume growth outlook - The company anticipates a shift in trade flows, with potential growth opportunities outside the U.S. despite current uncertainties [89][90] Question: Domestic business performance and pricing strategies - The GroundSaver product has seen an intentional decline in volume as the company adjusts its cost structure and focuses on revenue quality [94][95]

Core Insights - UPS is undergoing significant restructuring to enhance long-term profitability amid a challenging macro environment, focusing on controlling internal factors and executing strategic initiatives [1][4][12] Operational Changes - The company plans to close 164 operations and 73 buildings by the end of June to eliminate redundant infrastructure and realign capacity with demand [2] - UPS expects to reduce operational hours by approximately 25 million and cut around 20,000 positions, while continuing investments in automation and technology [3] - A planned volume reduction from Amazon is expected to exceed 50% by June 2026, reflecting a shift away from low-margin accounts [3][4] Financial Performance - UPS' first-quarter U.S. domestic revenue rose 1.4% to $14.5 billion, driven by air cargo increases and a 4.5% rise in revenue per piece, marking the strongest growth rate in eight quarters [6] - International revenue increased 2.7% to $4.4 billion, supported by a 7.1% rise in average daily volume, although non-GAAP operating profit fell 4.1% due to shifts toward more economical services [7] Strategic Initiatives - Under the "Efficiency Reimagined" initiative, UPS aims for $1 billion in savings in 2025 and a total of $3.5 billion in cost reductions by year-end [6] - New services like SurePost Final Mile delivery and Ground Saver are being introduced to enhance competitive positioning and cater to cost-conscious customers [10][11] - The acquisition of Andlauer Healthcare Group is intended to strengthen UPS' healthcare logistics capabilities, addressing a growing segment in global supply chains [11] Market Dynamics - SMBs now account for 31.2% of total U.S. volume, diversifying UPS' customer base away from major retailers [5] - The company is closely monitoring potential trade policy adjustments, particularly in the U.S.-China corridor, with international revenues expected to decline about 2% due to weakening demand [8]

Company Actions - United Parcel Service (UPS) announced it will cut approximately 20,000 jobs, representing about 4% of its workforce, and close 73 facilities to reduce costs amid economic uncertainty and a potential decrease in business from its largest customer, Amazon [1][5] - UPS previously reached an agreement with Amazon to reduce shipping volume by 50% by the second half of 2026, with Amazon accounting for 11.8% of UPS' overall revenue in 2024 [5] Economic Context - A slowdown in global trade is expected to decrease the demand for shipping services, which could negatively impact parcel delivery companies [2] - UPS CEO Carol Tome highlighted that the current trade environment presents unprecedented challenges not seen in over a century [2] Financial Implications - UPS anticipates expenses between $400 million and $600 million related to separation benefits and lease-related cuts in 2025 following previous workforce reductions [6] - The company is also facing a decline in volume from e-commerce sellers linked to China, such as Temu and Shein, due to new tariffs on previously duty-free goods [9] Strategic Initiatives - To assist customers with tariff and trade policy changes, UPS launched a website providing updates and expert connections [9] - UPS introduced a new Global Checkout service that displays customs fees and duties on international purchases at checkout [10]

Core Viewpoint - United Parcel Service (UPS) plans to cut 20,000 jobs and close 73 buildings due to weakened demand from Amazon and the impact of tariffs, expecting to save $3.5 billion this year [1][3]. Group 1: Job Cuts and Cost Savings - UPS announced a reduction of 20,000 jobs as part of its strategy to manage costs amid declining demand [1][5]. - The company anticipates saving $3.5 billion this year through these job cuts and the closure of 73 leased and owned buildings by the end of June [1][3]. Group 2: Financial Projections and Economic Environment - UPS projects expenses between $400 million to $600 million in 2025 related to separation benefits and lease costs [2]. - The company is not updating its full-year forecast due to economic uncertainty but is implementing cost-reduction measures [3][7]. - UPS reported first-quarter revenue of $21.5 billion, exceeding expectations, with revenue in its US segments growing 1.4% to $14.46 billion despite overall volume declines [13][14]. Group 3: Impact of Tariffs and Market Dynamics - The company is facing reduced deliveries from Amazon, which accounted for 11.8% of its revenue last year, and is also impacted by tariffs affecting trade with China [4][7]. - The tariffs, including a 145% rate on Chinese goods, are expected to slow trade and affect parcel delivery firms as consumers reduce purchases from overseas [7][12].

Topline UPS announced Tuesday it would lay off 20,000 workers this year, despite beating first-quarter profit estimates, as the shipping giant expects a decline in deliveries after cutting its shipments for Amazon in half earlier this year. The shipping giant halved its deliveries for Amazon earlier this year. Getty Images Key Facts UPS expects to save $3.5 billion in 2025 after cutting 20,000 jobs and closing 73 leased and owned buildings by the end of June, the company announced in its first-quarter earni ...

Financial Data and Key Metrics Changes - Consolidated revenue for Q1 2025 was $21.5 billion, a decrease of 0.7% year-over-year, aligning with expectations [7][30] - Consolidated operating profit increased to $1.8 billion, up 0.9% compared to the previous year [7][30] - Consolidated operating margin improved to 8.2%, an increase of 20 basis points year-over-year [7][30] - Diluted earnings per share rose to $1.49, reflecting a 4.2% increase from the prior year [7][30] Business Line Data and Key Metrics Changes - U.S. Domestic segment operating profit increased by $164 million year-over-year, with an operating margin expansion of 110 basis points [8][38] - Total U.S. average daily volume (ADV) decreased by 3.5%, with ground ADV down 2.5% and air ADV down 9.6% [32] - International segment ADV increased by 7.1%, with all regions showing growth [38] - Supply Chain Solutions revenue decreased by $471 million, primarily due to the divestiture of Coyote [40] Market Data and Key Metrics Changes - U.S. import volume is approximately 400,000 pieces per day, representing less than 2% of total global ADV [21] - Revenue from China to U.S. trade lanes accounted for 11% of total international revenue, while other trade lanes contributed 17% [21][22] - SMBs represented 31.2% of total U.S. volume, the highest concentration in ten years [34][19] Company Strategy and Development Direction - The company is executing a significant network reconfiguration, including 164 operational closures, to enhance efficiency and reduce costs [14][43] - The strategic focus includes reducing dependency on Amazon's volume by over 50% by June 2026, while maintaining profitable segments [12][46] - The company aims to improve revenue quality by targeting growth in healthcare, international, B2B, and SMB markets [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating a dynamic environment, emphasizing the importance of agility in operations [6][28] - The outlook for 2025 remains uncertain due to changing trade policies and tariffs, with no updates provided for the full-year outlook [26][50] - Management highlighted the need to model various scenarios to adapt to rapid shifts in business conditions [26][50] Other Important Information - The company generated $2.3 billion in cash from operations and paid $1.3 billion in dividends during Q1 [42] - The efficiency reimagined initiative is expected to deliver $1 billion in savings by improving operational processes [17][60] Q&A Session Summary Question: Cost savings from the $3.5 billion target - Approximately $500 million of the $3.5 billion cost savings was realized in Q1, with expectations for ramp-up in subsequent quarters [78][79] Question: Impact of tariffs on SMBs - SMBs are facing significant uncertainty due to tariffs, particularly those reliant on single sourcing from China [80][81] Question: International volume growth outlook - The company anticipates that trade flows will shift, allowing for potential growth in international markets despite challenges in the China to U.S. lane [89][90]