TLDR
- UPS reported Q3 earnings of $1.74 per share and revenue of $21.42 billion, beating Wall Street expectations of $1.31 EPS and $20.89 billion in revenue.
- The company has cut nearly 50,000 jobs this year, including 34,000 operational positions and 14,000 white-collar jobs, while closing 93 facilities.
- UPS achieved $2.2 billion in cost savings so far in 2025 and expects to reach $3.5 billion in total savings by year-end.
- The company provided Q4 revenue guidance of $24 billion, above analyst expectations of $23.74 billion, and projects adjusted operating margin of 11-11.5%.
- UPS plans to spin off its freight business by June 2026 and has completed $1 billion in share repurchases this year.
United Parcel Service shares climbed 7% on Tuesday after the company reported third-quarter results that topped analyst expectations. The stock reached its highest level in three months.
United Parcel Service, Inc., UPS
The Atlanta-based shipping company posted adjusted earnings of $1.74 per share. Revenue came in at $21.42 billion, down 3.7% from last year.
Analysts had expected much weaker numbers. The consensus was for earnings of $1.31 per share and revenue of $20.89 billion.
The results show UPS’s turnaround plan is gaining traction. The company launched its “Efficiency Reimagined” initiative to streamline operations and cut costs.
The numbers are pretty clear on the human side of this restructuring. UPS has reduced its workforce by approximately 34,000 operational positions during the first nine months of 2025.
The company also eliminated 14,000 white-collar jobs. That brings the total job cuts to nearly 50,000 this year.
UPS closed daily operations at 93 leased and owned buildings during the same period. The moves go beyond what executives outlined in April when they planned to cut roughly 20,000 operational employees and close about 70 facilities.
Cost Savings Exceed Targets
The aggressive approach is paying off financially. UPS achieved cost savings of about $2.2 billion so far this year.
The company expects to finish 2025 with savings of $3.5 billion compared with 2024. That’s a massive chunk of change for a company trying to improve its margins.
The U.S. Domestic Package segment saw revenues of $14.2 billion, down 2.7% year-over-year. Volume declined as expected, but revenue per piece remained strong.
International Package division revenues totaled $4.67 billion, up 5.9% from last year. Average daily volume increased 4.8% in this segment.
Supply Chain Solutions took the biggest hit. Revenues dropped 22.1% to $2.52 billion, mainly due to the divestiture of Coyote logistics in the third quarter of 2024.
Management Provides Forward Guidance
UPS gave fourth-quarter revenue guidance of approximately $24 billion. That’s above the analyst consensus of $23.74 billion.
The company projects adjusted operating margin for the December quarter in the 11-11.5% range. That compares favorably to the 10% reported in the September quarter.
The guidance marks a change in tone from last quarter. UPS didn’t provide a forecast then due to economic uncertainty.
Now executives believe the company is on firmer footing. They reinstated the full-year outlook in September, expecting 4% to 6% revenue growth this fiscal year.
UPS maintained its 2025 outlook. Capital expenditures are estimated at around $3.5 billion.
Dividend payments are expected to be around $5.5 billion, subject to board approval. The company has completed $1 billion in share repurchases.
The effective tax rate is projected at around 23.75%. UPS also confirmed plans to spin off its freight business by June 2026.
Despite Tuesday’s gains, UPS shares remain down nearly 30% for the year. The company has completed its planned $1 billion in share repurchases for 2025.
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