UPS Q1 2025 Earnings: Profit Surpasses Expectations, Revenue Slightly Below at $21.7B

Highlights from UPS Q1 2024 Earnings Report

• UPS reported adjusted earnings per share of $1.43, beating analyst forecasts of $1.31.
• Revenue reached $21.7 billion, slightly below the anticipated $21.89 billion.
• The company confirmed its full-year revenue forecast between $92 billion and $94.5 billion, with an adjusted operating margin of 10.0% to 10.6%.
• Cost-cutting measures contributed to a 1.4% reduction in operating expenses compared to last year.
• UPS will replace FedEx as the U.S. Postal Service's primary air cargo provider later this year, potentially enhancing future growth.

United Parcel Service (UPS) delivered a strong financial performance in the first quarter of 2024, surpassing adjusted profit expectations while experiencing a modest revenue shortfall. Adjusted net income stood at $1.22 billion, translating to $1.43 per share, outperforming Visible Alpha analyst estimates of $1.12 billion and $1.31 per share.

CEO Carol Tomé expressed optimism, stating, "Our Q1 financial results aligned with our outlook, and we saw sustained improvement in average daily U.S. volume throughout the quarter. We anticipate resuming growth in both volume and revenue moving forward."

Despite revenue falling just short of the $21.89 billion forecast, UPS’s strategic cost reductions helped maintain strong profitability. The company successfully lowered total operating expenses by 1.4% year-over-year, demonstrating effective management amid evolving market demand.

Like UPS, competitors such as FedEx have faced revenue declines following the pandemic-driven surge in package deliveries. UPS’s reaffirmed full-year guidance reflects confidence in navigating this shifting landscape, targeting revenues between $92 billion and $94.5 billion and maintaining solid operating margins.

In a strategic move, UPS announced it will become the primary air cargo provider for the U.S. Postal Service later this year, taking over from FedEx once the current contract expires in September. While the financial impact of this contract remains unspecified, it signals potential long-term revenue growth.

Following the earnings announcement, UPS shares experienced volatility, initially rising 3% in premarket trading before settling slightly lower. The stock closed the previous day at $145.36 but has experienced a decline of over 7% year-to-date and 25% over the past 12 months.

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