United Parcel Service has today stuck to its full-year revenue target despite projecting a return to growth in the second quarter as it cuts its exposure to top client Amazon while vying for higher-margin customers in the data centre and healthcare sectors.
US logistics firms including UPS and rival FedEx have been facing pressure over the past year from changing trade policies, notably the loss of duty-free "de minimis" treatment for low-value e-commerce shipments tied to China‑linked discount sellers such as Shein and Temu.
UPS CEO Carol Tome said the company would return to revenue and profit growth from the second quarter due to its transition to higher-paying shipments and cost cuts it undertook in recent quarters.
Over the last year, UPS has cut thousands of jobs as it ramps up automation at sorting hubs, in a bid to bring down operating costs.
The company maintained its forecast of a 1.2% rise in 2026 revenue to $89.7 billion and an adjusted operating margin of about 9.6%.
The lack of further details from UPS on its second-quarter forecast and a margin miss at the company's US Domestic segment, the company's top revenue driver, "is likely to be viewed unfavourably," Evercore ISI analyst Jonathan Chappell wrote in a note.
Jefferies, too, said the segment's adjusted operating margin of 4% was at the lower end of its 4% to 5% expectation.
Atlanta-based UPS reported adjusted net income of $1.07 per share for the three months ended March 31, compared with $1.49 per share a year earlier, but beat analysts' expectation of $1.02, according to data compiled by LSEG.
Quarterly revenue at the world's largest parcel delivery firm fell 1.6% to $21.2 billion. However, revenue per piece at its core US Domestic segment rose 6.5%.
