UPS Q1 Earnings: Adjusted EPS Rises 4.2% to $1.49 Despite Revenue Dip

Rhea-AI Summary

UPS reported its Q1 2025 financial results with consolidated revenues of $21.5 billion, showing a slight 0.7% decrease from Q1 2024. The company achieved a consolidated operating margin of 7.7% and non-GAAP adjusted margin of 8.2%.

Key highlights:

• Diluted EPS: $1.40; Non-GAAP adjusted EPS: $1.49 (up 4.2% year-over-year)
• U.S. Domestic revenue grew 1.4% to $14.46B with operating margin at 6.8%
• International segment revenue increased 2.7% to $4.37B with operating margin at 14.7%
• Supply Chain Solutions revenue declined 14.8% to $2.71B due to Coyote divestiture

The company is implementing network reconfiguration and cost reduction initiatives, expecting $3.5B in cost savings for 2025. Plans include closing 73 facilities by June 2025 and reducing operational workforce by approximately 20,000 positions.

Positive

• U.S. Domestic revenue grew 1.4% to $14.46B driven by air cargo and 4.5% improvement in revenue per piece
• International segment revenue increased 2.7% with 7.1% growth in average daily volume
• Overall operating profit increased 3.3% to $1.7B compared to Q1 2024
• Non-GAAP adjusted diluted EPS of $1.49, up 4.2% from previous year
• Expected cost savings of $3.5B from Network Reconfiguration and Efficiency Reimagined in 2025

Negative

• Consolidated revenues decreased 0.7% to $21.5B compared to last year
• Supply Chain Solutions revenue declined 14.8% due to Coyote divestiture
• Supply Chain Solutions operating profit dropped significantly to $46M from $124M last year
• Company unable to provide updated full-year outlook due to macro-economic uncertainty
• Planned reduction of operational workforce by 20,000 positions and closure of 73 buildings by June 2025

Insights

Financial Analyst

UPS shows resilience with 4.2% EPS growth despite revenue decline; transformation strategy targets $3.5B in savings amid economic uncertainty.

UPS reported $21.5 billion in Q1 2025 revenue, down 0.7% year-over-year, while non-GAAP adjusted diluted EPS increased 4.2% to $1.49. The company demonstrated margin improvement with consolidated operating margin at 7.7% (8.2% adjusted), indicating effective cost management amid volume challenges.

Breaking down segment performance reveals divergent results: U.S. Domestic segment grew revenue 1.4% with improved revenue per piece (+4.5%) offsetting volume declines. International segment posted 2.7% revenue growth driven by a robust 7.1% increase in average daily volume. However, Supply Chain Solutions experienced a 14.8% revenue decline, though primarily due to the Coyote divestiture.

Notably, UPS has maintained rather than updated its full-year outlook, citing macroeconomic uncertainty. This cautious approach suggests management is navigating an unpredictable business environment while implementing significant operational changes. The Q1 results demonstrate UPS's ability to generate modest earnings growth despite top-line pressure, achieved through disciplined margin management and initial benefits from transformation initiatives.

Supply Chain Expert

UPS's aggressive network restructuring aims to deliver $3.5B in 2025 savings while adapting to shifting logistics landscape.

UPS is executing a comprehensive transformation strategy in response to evolving market conditions. The Network Reconfiguration and Efficiency Reimagined programs represent a fundamental reshaping of operations, with plans to reduce the operational workforce by approximately 20,000 positions in 2025 and close 73 buildings by June. These initiatives, while requiring $400-600 million in implementation costs this year, are targeted to deliver $3.5 billion in cost savings for 2025, with $80 million already realized in Q1.

The company's segment performance reflects both challenges and strategic adaptations. Despite volume declines in the U.S. Domestic segment, UPS achieved 4.5% improvement in revenue per piece, demonstrating effective yield management. The International segment's volume growth of 7.1% indicates successful capture of cross-border shipment demand. Meanwhile, the Supply Chain Solutions segment's 14.8% revenue decline was largely attributed to the strategic Coyote divestiture, aligning with portfolio optimization efforts.

Management's decision not to update full-year guidance signals caution amid what CEO Carol Tomé described as a "very dynamic environment." The transformation initiatives appear well-timed as UPS positions itself to operate more efficiently in an uncertain macro landscape while maintaining service quality across its global integrated network.

UPS Reports Q1 2025 Results: Adjusted EPS Rises 4.2% Despite Revenue Decline

UPS (NYSE:UPS) reported first-quarter 2025 financial results on April 29, showing a slight revenue decline but improved earnings per share compared to the same period last year, as the logistics giant continues implementing significant cost-cutting measures amid macroeconomic uncertainty.

The Atlanta-based package delivery company posted consolidated revenues of $21.5 billion for the quarter, representing a 0.7% decrease from the first quarter of 2024. Despite the revenue dip, UPS managed to increase its consolidated operating profit by 3.3% to $1.7 billion compared to the same period last year.

Diluted earnings per share reached $1.40 for the quarter, while non-GAAP adjusted diluted earnings per share came in at $1.49, marking a 4.2% improvement over the comparable period in 2024.

Segment Performance Shows Mixed Results

UPS's U.S. Domestic segment delivered revenue growth of 1.4% to $14.46 billion, driven by increases in air cargo and a 4.5% improvement in revenue per piece, which helped offset a decline in package volume. The segment reported an operating margin of 6.8%, with a non-GAAP adjusted operating margin of 7.0%.

The International segment saw revenue increase by 2.7% to $4.37 billion, primarily due to a 7.1% increase in average daily volume. Operating margin for this segment was 14.7%, with a non-GAAP adjusted operating margin of 15.0%.

However, the Supply Chain Solutions segment experienced a significant revenue decline of 14.8% to $2.71 billion, which the company attributed primarily to the divestiture of Coyote. This segment's operating margin was 1.7%, with a non-GAAP adjusted operating margin of 3.6%.

Cost-Cutting Measures and Network Transformation

UPS is in the midst of significant operational changes as part of its transformation strategy. According to the press release, the company expects to reduce its operational workforce by approximately 20,000 positions during 2025 and close 73 leased and owned buildings by the end of June 2025.

The company anticipates $3.5 billion of total cost savings will be delivered from its Network Reconfiguration and Efficiency Reimagined programs in 2025. During the first quarter, UPS realized benefits of approximately $80 million from these initiatives.

"I want to thank all UPSers for their hard work and efforts in this very dynamic environment," said Carol Tomé, UPS chief executive officer. "As a trusted leader in global logistics, we will leverage our integrated network and trade expertise to assist our customers as they adapt to a changing trade environment. Further, the actions we are taking to reconfigure our network and reduce cost across our business could not be timelier. The macro environment may be uncertain, but with our actions, we will emerge as an even stronger, more nimble UPS."

Outlook Remains Unchanged Amid Uncertainty

Given the current macroeconomic uncertainty, UPS stated that it is not providing any updates to its previously issued consolidated full-year outlook. The company indicated that expectations for second-quarter 2025 financial performance will be provided during its first-quarter earnings conference call.

The first-quarter 2025 GAAP results included a net charge of $83 million, or $0.09 per diluted share, comprised of after-tax transformation strategy costs of $44 million and a non-cash, after-tax impairment charge of $49 million, primarily related to asset and investment impairments. These charges were partially offset by a $10 million benefit for the partial reversal of an income tax valuation allowance.

This article is based solely on information provided in UPS's press release dated April 29, 2025. The content is for informational purposes only and does not constitute financial, investment, legal, or tax advice. Stock Titan and its writers make no representations as to the accuracy, completeness, or timeliness of the information. Investors should conduct their own due diligence before making any investment decisions.

Source: UPS

FAQ

How much did UPS (UPS) earn per share in Q1 2025?

UPS reported Q1 2025 diluted earnings per share of $1.40, with non-GAAP adjusted diluted earnings per share of $1.49, showing a 4.2% increase compared to Q1 2024's $1.43.

What was UPS revenue in first quarter 2025 vs 2024?

UPS reported Q1 2025 consolidated revenues of $21.5 billion, representing a 0.7% decrease from $21.7 billion in Q1 2024.

How did UPS US Domestic segment perform in Q1 2025?

UPS US Domestic segment revenue grew 1.4% to $14.46 billion, driven by air cargo increases and 4.5% improvement in revenue per piece, despite volume decline. Operating margin was 6.8% (7.0% non-GAAP adjusted).

What is UPS outlook for 2025 given Q1 results?

Due to macro-economic uncertainty, UPS is not providing updates to its consolidated full-year outlook. Second-quarter expectations will be discussed during the Q1 2025 earnings conference call.

How much cost savings will UPS Network Reconfiguration deliver in 2025?

UPS anticipates $3.5 billion in total cost savings from Network Reconfiguration and Efficiency Reimagined initiatives in 2025, including workforce reduction of 20,000 positions and closure of 73 facilities by June 2025.