Revenue Woes Continue to Plague UPS: Is a Turnaround on the Horizon?

Core Insights - United Parcel Service (UPS) is experiencing revenue weakness due to geopolitical uncertainty and high inflation impacting consumer sentiment and growth expectations [1] - The company has seen a decline in package shipping volumes, with average daily volumes down 3.8% year over year in the first half of 2025 [2] - UPS has made a strategic decision to reduce its business with Amazon, aiming for a volume reduction of over 50% by June 2026, which is expected to keep near-term volumes subdued [2] Financial Performance - Total revenues at UPS fell 1.7% year over year in the first six months of 2025, driven by sluggish volumes [2] - The Zacks Consensus Estimate for UPS' earnings has been revised downward over the past 60 days for the third quarter, fourth quarter, full-year 2025, and full-year 2026 [11] - UPS shares have declined over 30% in 2025, underperforming its industry [5][9] Market Conditions - The trade-related economic uncertainty is contributing to UPS' challenges, with no revenue or operating profit guidance provided for 2025 due to macroeconomic uncertainty [3] - Volatility in the U.S. stock market is expected to persist, affecting UPS' top line despite cost-cutting efforts [3] Competitive Landscape - FedEx, a rival of UPS, is also facing weak demand and is implementing cost-cutting measures, including layoffs and operational reshuffling [4] - FedEx's DRIVE program has resulted in significant cost savings, indicating a competitive response to the current market conditions [4]