UPS(US:UPS)2025-11-05 21:54Financial Performance - Revenue for Q3 2025 was $21.415 billion, a decrease of 3.7% from $22.245 billion in Q3 2024[229] - Operating profit for Q3 2025 was $1.804 billion, down 9.1% from $1.985 billion in Q3 2024[229] - Net income for Q3 2025 was $1.311 billion, a decline of 14.8% compared to $1.539 billion in Q3 2024[229] - Total revenue for Q3 2025 was $14,220 million, a decrease of 2.6% from $14,597 million in Q3 2024, driven by a 12.3% decline in volume[258] - Operating profit for Q3 2025 was $603 million, down 28.5% from $843 million in Q3 2024, resulting in an operating margin of 4.2%[258] - Non-GAAP adjusted operating profit decreased by 1.5% to $905 million in Q3 2025, with a non-GAAP adjusted operating margin of 6.4%[258] Volume and Revenue Trends - Average daily package volume decreased by 9.8% in Q3 2025, driven by planned volume declines from the largest customer[231] - Average daily package volume decreased by 12.3% in Q3 2025 compared to Q3 2024, with significant declines in Next Day Air (10.9%), Deferred (18.6%), and Ground (12.0%) segments[258] - Business-to-consumer volume decreased by 17.6% in Q3 2025, while business-to-business volume decreased by 4.8%[261] - Average daily package volume increased by 4.8% year-over-year in Q3 2025, with domestic volume up 3.6% and export volume up 5.9%[271][274] Cost Management and Expenses - Operating expenses decreased by 3.2% to $19.611 billion in Q3 2025, compared to $20.260 billion in Q3 2024[229] - Operating expenses decreased by 1.0% to $13,617 million in Q3 2025, primarily due to a $398 million decline in facility and transportation-related costs[267] - Total operating expenses decreased by $649 million (down 3.2%) for the quarter and $1.3 billion (down 2.2%) year-to-date, primarily due to the divestiture of Coyote[287][291] - Non-GAAP adjusted operating expenses decreased by $979 million (down 4.8%) for the quarter and $1.6 billion (down 2.6%) year-to-date[291] Strategic Initiatives - The company is undergoing a strategic shift to reduce volume from its largest customer by more than 50% by June 2026[221] - The Fit to Serve initiative resulted in a workforce reduction of approximately 14,000 positions and has achieved savings of approximately $1.0 billion through reductions in compensation and benefit expenses[238] - The Network Reconfiguration initiative has led to a reduction of approximately 34,000 positions and the closure of 93 facilities, with realized cost savings of approximately $2.2 billion as of September 30, 2025, and an expected total of $3.5 billion in savings for 2025[239] Shareholder Returns - The company returned $5.0 billion to shareholders through share repurchases of $1.0 billion and dividends of $4.0 billion during the nine months ended September 30, 2025[228] - Dividends declared per share increased to $4.92 in 2025 from $4.89 in 2024[325] Cash Flow and Liquidity - Net cash from operating activities decreased by $1.7 billion year to date, totaling $5.148 billion, driven by various factors including changes in working capital[313] - As of September 30, 2025, the company had $6.8 billion in cash, cash equivalents, and marketable securities, indicating strong liquidity to fund operations and planned expenditures[312] - Total capital expenditures for the nine months ended September 30, 2025, were $2,969 million, representing 4.6% of revenue, slightly up from 4.3% in 2024[316] Acquisitions and Investments - The acquisition of Frigo-Trans and Andlauer Healthcare Group expanded the company's cold-chain logistics capabilities[223] - Cash paid for acquisitions in the nine months ended September 30, 2025, was $(479) million, primarily for the acquisition of Frigo-Trans[319] Debt and Financing - Total debt outstanding as of September 30, 2025, was $24,782 million, compared to $21,930 million in 2024[324] - Net cash used in financing activities for the nine months ended September 30, 2025, was $(1,947) million, down from $(5,003) million in 2024[324]