UPS Reports Q3 2025 Earnings, Exceeds Analyst EPS Estimates with $1.74 Adjusted EPS

United Parcel Service (UPS.US) announced its Third Quarter 2025 results, reporting non-GAAP adjusted diluted earnings per share of $1.74, surpassing analyst estimates of $1.31. Consolidated revenues reached $21.4 billion. This performance compares to non-GAAP adjusted diluted EPS of $1.76 in Q3 2024, representing a slight year-over-year decrease of 1.1%. The company's non-GAAP adjusted consolidated operating margin for the quarter was 10.0%.

Segment Performance Highlights

The International Segment demonstrated robust growth, with revenue increasing by 5.9% to $4.673 billion, primarily driven by a 4.8% increase in average daily volume. Its non-GAAP adjusted operating margin stood at 14.8%. Conversely, the U.S. Domestic Segment experienced a revenue decline of 2.6% to $14.220 billion, mainly due to an expected decrease in volume, partially offset by higher revenue per piece.

Supply Chain Solutions revenue declined by 22.1% to $2.522 billion, largely attributable to the divestiture of Coyote in Q3 2024. Despite this, the segment achieved a non-GAAP adjusted operating margin of 21.3%, significantly up from 8.4% in the prior year, benefiting from a $330 million pre-tax gain from a sale-leaseback transaction.

Transformation Strategy and Cost Savings

UPS is actively executing a significant transformation strategy, which includes initiatives like Network Reconfiguration and Efficiency Reimagined. As of September 30, 2025, these efforts have resulted in approximately $2.2 billion in cost savings year-to-date, with an expectation to reach $3.5 billion in total year-over-year cost savings for 2025. The company has reduced its operational workforce by approximately 34,000 positions and closed daily operations at 93 leased and owned buildings as part of these initiatives.

Management Outlook

For the fourth quarter of 2025, UPS anticipates consolidated revenue to be approximately $24.0 billion and a non-GAAP adjusted operating margin of approximately 11.0% - 11.5%. The company confirmed its full-year 2025 capital allocation expectations, including capital expenditures of approximately $3.5 billion and dividend payments around $5.5 billion, subject to Board approval.