United Parcel 2025 Q2 Earnings Net Income Declines 8.9%

United Parcel (UPS), ranking 190th by market capitalization, reported its fiscal 2025 Q2 earnings on Jul 28th, 2025. United Parcel missed analyst expectations for its fiscal 2025 Q2 results, reporting a decline in revenue and net income. The company did not adjust its guidance, citing macroeconomic uncertainty. Analysts had anticipated better results, but market conditions proved challenging. UPS remains focused on strategic initiatives to improve long-term performance and maintain competitive advantage despite current setbacks.

Revenue
United Parcel's overall revenue for the second quarter of 2025 fell to $21.22 billion, marking a 2.7% decline from $21.82 billion in the same period last year. The U.S. Domestic Package segment contributed $14.08 billion, reflecting a slight decrease compared to the previous year. Meanwhile, the International Package segment saw a modest increase, reaching $4.49 billion. The Supply Chain Solutions segment experienced a significant drop, generating $2.65 billion in revenue. Together, these segments aggregated to a total revenue of $21.22 billion.

Earnings/Net Income
United Parcel's earnings per share (EPS) dropped 8.5% to $1.51 in 2025 Q2 from $1.65 in 2024 Q2. Similarly, net income decreased to $1.28 billion, reflecting an 8.9% decline from $1.41 billion in the previous year's quarter. The sustained profitability over two decades highlights operational resilience, although the current EPS performance is disappointing.

Price Action
The stock price of United Parcel edged down 1.44% during the latest trading day, while it rose 2.71% during the most recent full trading week and increased 2.22% month-to-date.

Post-Earnings Price Action Review
The strategy of purchasing UPS shares after a revenue beat and holding for 30 days yielded a 17.42% return over the past three years, which is notably lower than the benchmark return of 88.74%. This indicates the strategy missed broader market gains. The Sharpe ratio of 0.15 suggests moderate risk, but the strategy offered no significant downside protection. While the maximum drawdown was stable at 0%, the returns did not compensate for the risk taken. This analysis highlights the need for reevaluating investment strategies concerning UPS shares, as the historical performance suggests they have struggled to match broader market trends.

CEO Commentary
Carol Tomé, CEO of UPS, emphasized the company's strong execution amid a complex trade environment, reflecting on the second-quarter results. She noted that while challenges persist, the company is advancing its strategic initiatives, which are expected to bolster long-term financial performance and enhance competitive advantage. Tomé thanked UPS employees for their dedication, highlighting their role in navigating the evolving landscape. She indicated confidence in the ongoing transformation efforts, suggesting that these actions are pivotal for the company's future success.

Guidance
UPS has not provided specific revenue or operating profit guidance for 2025 due to macroeconomic uncertainty. However, the company confirmed capital expenditures of approximately $3.5 billion, dividend payments expected to be around $5.5 billion, an effective tax rate of approximately 23.5%, and $1.4 billion in pension contributions. Share repurchases are anticipated at around $1.0 billion, with $3.5 billion in expected expense reductions from network reconfiguration and Efficiency Reimagined initiatives.

Additional News
In recent weeks, UPS has made significant strides in expanding its healthcare logistics capabilities by acquiring Andlauer Healthcare Group for $1.6 billion. This acquisition aims to enhance UPS's global cold chain infrastructure and specialized transportation solutions. Additionally, UPS appointed John Morikis, former CEO of Sherwin-Williams, to its Board of Directors, adding expertise in global operations and supply chain optimization. The company also declared a quarterly dividend of $1.64 per share, maintaining its commitment to returning value to shareholders. These strategic moves reflect UPS's focus on strengthening its leadership and operational scope amidst challenging market conditions.