UPS Reports Decline in Earnings, Revenue in Q2
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UPS Inc.’s revenue and earnings declined amid an uncertain and complex trade environment during the second quarter of 2025, the company reported July 29.
The Atlanta-based shipping and logistics company posted net income of $1.28 billion, or $1.51 a diluted share, for the three months ending June 30. That compared with $1.41 billion, $1.65, during the same time the previous year. Total revenue decreased by 2.7% to $21.2 billion from $21.8 billion.
UPS ranks No. 1 on the Transport Topics Top 100 list of the largest for-hire carriers in North America, and UPS Supply Chain Solutions is No. 5 on the TT Top 100 list of the largest logistics companies. The company also ranks No. 3 on the TT Top 50 list of the largest global freight carriers.
“Our team of dedicated UPSers remained focused on execution while keeping supply chains moving and delivering best-in-class service,” CEO Carol Tomé said during a call with investors. “Our second-quarter financial results reflect the impact of a complex macro environment, driven by ever-evolving trade policies, as well as the significant actions we are taking to strengthen UPS’ competitive and financial positioning.”
UPS also made progress on strategic actions laid out in January. Those have included accelerating the glide down of Amazon volume, transitioning ground saver products and generating savings through its efficiency initiative. The company also has been pursuing what it calls a “better and bolder” approach as part of a three-year financial initiative launched last year.
“Despite uncertainties around trade policies, in the second quarter the overall U.S. economy demonstrated continued resilience,” Tomé said. “But our sector, specifically the U.S. small package market, was unfavorably impacted by U.S. consumer sentiment that was near historic lows.”
Shift in Consumer Spending
Tomé noted that for the first time in three years, consumer spending on discretionary categories such as restaurants and automobiles outpaced growth for essential items. She also pointed out that on the commercial side of the economy, manufacturing activity has remained soft.
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“These macroeconomic dynamics impacted overall market demand as well as demand by customer segments and product,” Tomé said. “In the quarter, our overall U.S. average daily volume declined by 7.3%. But due to our strategic actions, we saw a positive shift in the mix of business as revenue declined by just 0.8%.”
The results approached Wall Street’s expectations of $1.56 per share and quarterly revenue of $20.85 billion, according to Zacks Consensus Estimate.
“Moving to the business climate outside of the U.S., trade follows policies, and generally tariffs are not good for trade,” Tomé said. “With the announcement of certain changes to trade policies in the second quarter, we saw that play out. For example, looking at our China-to-U.S. trade lane, an increased tariff and the elimination of de minimis exceptions resulted in a year-over-year drop in average daily volume of 34.8% for the months of May and June.”
Revenue by Segment
• U.S. Domestic revenue decreased 0.8% to $14.1 billion from $14.2 billion during the 2024 period. The decline primarily was driven by an expected drop in volume. This was partially offset by increases in air cargo and revenue per piece. Operating profit declined 7.3% to $916 million from $988 million last year.
• International revenue increased 2.6% to $4.49 billion from $4.37 billion in 2024. The revenue gain was driven by a 3.9% rise in average daily volume. Operating profit declined 6.4% to $672 million from $718 million.
• Supply Chain Solutions revenue dropped 18.3% to $2.65 billion from $3.25 billion, primarily due to the impact from the Q3 2024 divestiture of Coyote Logistics. Operating profit decreased 1.7% to $234 million from $238 million.
Edward Jones Investments expressed optimism that the “better and bolder” strategy will lead to increased profitability as the company focuses on ensuring it is realizing returns on investments. This includes capital investments in its delivery network to improve pricing, efficiency and cost actions. The financial services firm also noted international growth and the continued rise in e-commerce should help drive demand for services.
“The quarter was mixed for UPS, with variations in shipping volumes and pricing across the business,” Edward Jones financial analyst Jeff Windau wrote. “Overall, we believe the company’s strategic moves should streamline operations by reducing low-profit packages and prioritizing higher-value packages.
“Package-volume trends may face some near-term headwinds due to tariff uncertainties. However, longer term, we continue to expect a recovery as the industry moves past its cyclical lows. This recovery, combined with potential pricing improvement, should further improve profitability.”
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