UPS Delivers Mixed Bag: Q1 Supply Chain Weakness Offset By Strong Domestic And International Growth

United Parcel Service Inc. UPS shares rose in premarket trading Tuesday after the company posted better-than-expected first-quarter 2025 results.

UPS reported a consolidated revenue decline of 0.7% year-over-year to $21.546 billion, beating the consensus of $21.05 billion. Adjusted EPS was $1.49, up 4.3% YoY, above the consensus of $1.38.

GAAP results included a net charge of $83M ($0.09/share) tied to strategy costs and asset impairments, partially offset by a small tax benefit reversal.

The company consolidated operating profit of $1.763 billion, up 3.3% year over year. Adjusted operating profit rose 0.9%. Adjusted operating margin stood at 8.2%, up from 8.00% a year ago.

U.S. Domestic Segment revenue increased 1.4% to $14.46 billion, reflecting a 4.5% increase in revenue per piece and increases in air cargo. The adjusted operating margin stood at 7%.

International Segment revenue grew 2.7% to $4.373 billion, reflecting a 7.1% increase in average daily volume. The adjusted operating margin was 15%.

Supply Chain Solutions Segment revenue declined by 14.8% to $2.713 billion, driven by the Coyote divestiture. The adjusted operating margin was 3.6%.

Also Read: UPS Expands Delivery Options With Two New Ground Services

UPS' operating cash flow for the quarter totaled $2.318 billion, and free cash flow was $1.487 billion.

"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," said Carol Tomé, UPS’s chief executive officer.

2025 Outlook: Amid ongoing macroeconomic uncertainty, UPS is holding off on updating its full-year outlook and will share Q2 expectations during its Q1 2025 earnings call.

Previous guidance: UPS expects revenue of ~ $89 billion, below the $95.01 billion consensus, and sees an adjusted operating margin of 10.8%.

The company plans $3.5 billion in capital spending, $5.5 billion in dividends (pending approval), $1 billion in share buybacks, and an expected 23.5% tax rate.

Price Action: UPS shares are trading higher by 0.95% at $98.01 premarket at the last check Tuesday.

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