UPS Q4 2024 Earnings Report

UPS Stock Plummets Amid Strategic Shift

UPS faced its most significant trading drop ever, with shares falling 14.1% to $114.90 after the announcement that it will cut business with Amazon by more than 50% by mid-2026. While this strategy is intended to enhance profitability, it has made investors uneasy, considering Amazon accounts for 11.8% of UPS’s revenue ($10.7 billion).

Financial Highlights & Market Reaction

• Q4 Revenue: $25.3 billion (+1.5% YoY), slightly below expectations.

• U.S. Domestic Revenue: $17.31 billion (+2.2%), exceeding expectations.

• International Revenue: $4.92 billion (+6.9%), beating forecasts.

• Supply Chain Solutions Revenue: $3.07 billion (-9.1%), missing estimates.

• Net Income: Increased to $1.72 billion ($2.01 per share).

• Adjusted EPS: $2.75, surpassing projections of $2.53.

• 2025 Outlook: Anticipated revenue drop to $89 billion, falling short of Wall Street’s $95 billion estimate.

• Stock Impact: UPS fell 20.8% over the past year, while FedEx gained 10.5%.

Cost-Cutting & Operational Changes

• Closing 11 facilities in 2024 to save $1 billion.

• Integrating SurePost services internally to eliminate USPS delays and costs.

Analyst Takeaways

• Analysts foresee long-term gains but short-term challenges. UPS’s focus on high-margin sectors like healthcare may offset declining volume, but investor confidence remains shaken.

Source: UPS.com

How does this impact me?

With UPS restructuring its operations, many businesses may face shipping disruptions, rising costs, and shifting service priorities. Businesses heavily reliant on UPS may need help adapting to these changes.

We can provide expert consulting to assess your shipping strategy, recommend alternative carriers, and develop a resilient logistics plan to mitigate risks and costs.

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