UPS Q1 Profit Rises, Revenue Edges Down; To Cut Around 20,000 Jobs, Sees $3.5 Bln Cost Savings

United Parcel Service

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(RTTNews) - United Parcel Service, Inc. (UPS) reported Tuesday higher profit in its first quarter, despite a slight drop in revenues. Further, the company said it is not updating fiscal 2025 outlook due to the current macro-economic uncertainty.

Further, the company now said it expects to reduce operational workforce by around 20,000 positions during 2025 in connection with the Network Reconfiguration and Efficiency Reimagined programs announced earlier. The firm also plans to close 73 leased and owned buildings by the end of June 2025.

UPS began Network Reconfiguration initiative in connection with the anticipation of lower volumes from its largest customer Amazon.com Inc.

UPS anticipates that $3.5 billion of total cost savings will be delivered from Network Reconfiguration and Efficiency Reimagined in 2025.

The company is continuing to review its network and may identify additional buildings for closure.

The company's Network Reconfiguration initiative is an expansion of Network of the Future and will lead to consolidations of facilities and workforce as well as an end-to-end process redesign.

Further, Efficiency Reimagined initiatives were launched to undertake the end-to-end process redesign effort which will align its organizational processes to the network reconfiguration.

As of March 31, the company continues to evaluate the impact of expected changes in volume on air network.

Further, UPS said it is not providing any updates to its previously issued fiscal 2025 outlook.

The courier company previously forecasted around $89 billion in revenue for 2025 and operating margin to be approximately 10.8 percent. In 2024, revenue was $91.1 billion, and operating margin was 9.3 percent.

The Wall Street analysts on average expect the company to report revenues of $88.06 billion. Analysts' estimates typically exclude special items.

In the first quarter, net income grew 6.6 percent to $1.19 billion from last year's $1.11 bilion. Earnings per share increased 7.7 percent to $1.40 from $1.30 a year ago.

Adjusted earnings per share were $1.49, compared to $1.43 last year.

Consolidated revenues, meanwhile, edged down 0.7 percent to $21.55 billion from prior year's $21.71 billion last year.

In pre-market activity on the NYSE, UPS shares were gaining around 0.9 percent to trade at $97.98.

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