UPS's Net Income Declines 12.9% in Q2 2025

UPS reported second-quarter 2025 consolidated revenues of $21.2 billion. The company's diluted EPS for the quarter was $1.51. The consolidated revenue remained relatively stable compared to the prior year's $21.2 billion, reflecting a 0.0% change. Net income saw a decrease of -12.9%, falling to $1.283 billion from $1.473 billion in the prior year period. Analysts had estimated a revenue of $20.85 billion and an EPS of $1.56. The company exceeded revenue expectations but fell slightly short on EPS.

Segment Performance

The U.S. Domestic Segment experienced a revenue decline of 0.8% year-over-year, primarily due to an expected decrease in volume, which was partially offset by increases in air cargo and revenue per piece. The International Segment, however, saw a revenue increase of 2.6%, driven by a 3.9% rise in average daily volume. Operating profit for the International Segment decreased by 6.4%.

Supply Chain Solutions & Strategic Initiatives

Revenue in Supply Chain Solutions declined by 18.3%, mainly attributed to the impact of the divestiture of Coyote in the third quarter of 2024. Despite this, the segment's operating margin improved to 8.8% from 7.3% in the prior year.

UPS is making meaningful progress on its strategic initiatives, including network reconfiguration and Efficiency Reimagined initiatives, which are on track to achieve full-year savings targets. Management stated these actions are positioning the company for stronger long-term financial performance and enhanced competitive advantage. The company expects to reduce its operational workforce by approximately 20,000 positions during 2025 and anticipates $3.5 billion in total cost savings from these initiatives.

2025 Outlook

Due to current macro-economic uncertainty, UPS is not providing specific revenue or operating profit guidance for 2025. However, the company confirmed several full-year expectations, including capital expenditures of approximately $3.5 billion, dividend payments around $5.5 billion, and an effective tax rate of approximately 23.5%. The company also completed share repurchases of around $1.0 billion.