UPS Reports Revenue and Net Income Decline in Q2 2025

United Parcel Service, Inc. (UPS) reported its financial results for the second quarter and first half of 2025, revealing a decline in revenue and net income compared to the same period in 2024. For the three months ended June 30, 2025, UPS generated revenue of $21.22 billion, a decrease of 2.7% from $21.82 billion in the prior year. Net income for the quarter was $1.28 billion, down 8.9% from $1.41 billion, resulting in diluted earnings per share of $1.51, compared to $1.65 in the previous year. Year-to-date revenue also fell to $42.77 billion from $43.52 billion, with net income decreasing to $2.47 billion from $2.52 billion.

The decline in revenue and profitability was attributed to several factors, including a strategic decision to reduce volume from its largest customer, which is expected to decrease by more than 50% by June 2026. This volume reduction, combined with a shift in product mix and pricing actions, particularly in the Ground Saver product, pressured operating results. Additionally, UPS faced challenges from changing global trade policies and tariffs, which impacted international segment margins. Despite these challenges, the company reported growth in air cargo revenue, benefiting from a contract with the U.S. Postal Service that was fully onboarded in late 2024.

In terms of operational metrics, UPS reported an average daily package volume of 19.74 million for the second quarter, a decrease of 5.7% from the previous year. The U.S. Domestic Package segment saw a decline in volume, while the International Package segment experienced growth, particularly in domestic and export products. The company also completed the acquisition of Frigo-Trans, enhancing its healthcare logistics capabilities, and announced plans to acquire Andlauer Healthcare Group, expected to close in late 2025.

UPS's total operating expenses for the second quarter were $19.40 billion, down 2.4% from $19.87 billion in the prior year. The decrease was primarily driven by lower purchased transportation and fuel expenses, although compensation and benefits costs increased due to higher operational demands. The company continues to execute its transformation strategy, which includes workforce reductions and operational efficiencies, with total transformation strategy costs amounting to $74 million for the quarter. Looking ahead, UPS anticipates ongoing challenges from macroeconomic conditions but expects to realize significant savings from its transformation initiatives, projecting $3.5 billion in savings for 2025.