UPS Cuts Amazon Deliveries to Drive Profitability
New York, NY - UPS (UPS) announced plans to significantly reduce deliveries for Amazon (AMZN) to enhance long-term profitability. The decision has led to a notable stock decline for UPS.
Strategic Shift
UPS CFO Brian Dykes explained that the move is part of a broader shift to optimize resources and maximize returns. The company will cut Amazon delivery volume by over 50% by mid-2026, prioritizing higher-yield segments.
Revenue Forecast
Despite lower volumes, UPS anticipates "approximately $89 billion" in revenue for 2025, slightly below market consensus estimates of $94.9 billion.
Analyst Reaction
Analysts have expressed mixed reactions. While some applaud the strategic repositioning, others are concerned about the near-term impact of reduced Amazon volumes.
Quarterly Performance
UPS reported fourth-quarter earnings per share of $2.75, exceeding expectations. However, the focus remains on the impact of the Amazon delivery adjustment.
Investor Sentiment
Investors are cautious following the news, particularly given the challenges faced by the company in recent years. The emphasis remains on the reduced sales outlook and decreased Amazon partnership.