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]

Core Viewpoint - United Parcel Service (UPS) is facing significant challenges, including a stock price near a five-year low and a projected revenue decline, prompting investors to weigh the potential for a strategic entry point against fundamental risks ahead [1][2][4]. Financial Performance - UPS's stock has dropped approximately 25% over the past year, with full-year 2025 revenue guidance projected at $89.0 billion, below the $91.1 billion achieved in 2024 and analyst expectations [2][4]. - The company aims for an adjusted operating margin of approximately 10.8% in 2025, up from 9.8% in 2024, indicating confidence in efficiency measures despite lower revenue projections [8]. Strategic Initiatives - UPS is implementing a strategic transformation called "Efficiency Reimagined," targeting $1.0 billion in annualized savings through network reconfiguration, with near-term costs estimated at $300 to $400 million in 2025 [6]. - The company plans to insource the UPS SurePost product to improve control and margins while investing in high-growth areas like healthcare logistics and SMB services [7]. Market Outlook - Analysts have lowered price targets for UPS, reflecting concerns about near-term headwinds, but the overall consensus remains a moderate buy with a 12-month price forecast of $137.57, suggesting a potential upside of 25.45% [5][9][11]. - The stock currently offers a dividend yield of approximately 5.91%, with a strong history of returning capital to shareholders, including a recent increase in quarterly dividends from $1.63 to $1.64 per share [9][10]. Operational Challenges - UPS is deliberately reducing business volume with its largest customer, believed to be Amazon, raising questions about the company's ability to replace that volume profitably [3][4]. - Broader concerns about weakening package delivery demand as e-commerce growth normalizes post-pandemic add to the company's challenges [4][12].