UPS shares tumble 14% after disappointing 2025 revenue forecast | Stock Market News

Shares of United Parcel Service (UPS) tumbled as much as 14% in premarket trading in New York on Thursday after the courier forecast 2025 revenue much below Wall Street expectations.

The Atlanta-based company forecast revenue of $89 billion for this year, compared with the analysts expectation of $94.9 billion.

It also forecast full-year consolidated operating margin at 10.8%, an increase from the 9.8% it reported for 2024.

The company said its 2024 revenue came in at $91.1 billion.

Its fourth quarter earnings stood at $2.75 a share.

Package volumes have fallen from pandemic-era peaks as companies and retail consumers rely less on parcel shipments. Some customers also have traded down from premium to economy services, cutting into the company’s earnings.

Reducing deliveries for Amazon

UPS said it had reached an agreement with its largest customer — widely understood to be Amazon — to lower volumes by more than 50% by the second half of 2026.

Amazon and its affiliates accounted for about 11.8% of UPS’s overall revenue in 2023.

UPS said carrying less freight for Amazon will eventually boost its revenue per piece.

The move is part of an effort to reduce the amount of low-value packages in UPS’ network in favor of “growing in the best parts of the market,” UPS Chief Executive Officer Carol Tome said in a statement.

“We are making business and operational changes that, along with the foundational changes we’ve already made, will put us further down the path to becoming a more profitable, agile and differentiated UPS,” Tome said.

In cost cutting measures, the company is in the process of shuttering some facilities around the US and refurbishing others to make way for automation that could help save on labor costs in the future.

The UPS stock had declined 20% in 2024 and risen about 6% this year so far.

It is also planning a multi-year redesign of its network to go after $1 billion in savings.