(Bloomberg) – United Parcel Service Inc. Plondée shares after the company has provided annual income much lower than expectations, indicating to investors that a long -awaited rebound in demand for its package services will not arrive this year and the ‘inciting to reduce its weak business with Amazon.com Inc.
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UPS’s basic package operations have been extended to demand, as the package volumes fell from peaks from the pandemic era. Some customers have also negotiated bonus services to economic services, reducing the benefits of the company based in Atlanta.
It aims to adapt by shipping less upper margin packages and reducing less profitable deliveries. UPS said Thursday that it had entered into an agreement with Amazon to reduce volumes by more than 50% by the second half of 2026.
“Amazon is our greatest client, but it is not our most profitable client,” CEO Carol Tomé told Investors during a call conference.
Amazon confirmed that he would ship less package with UPS, even if the online retailer had initially asked to ship more by mail. “We will continue to join them and many other carriers to serve our customers,” said Amazon spokesman Kelly Nantel in a statement sent by e-mail.
UPS provides for a turnover of $ 89 billion for 2025, against the average wait for analysts of $ 94.9 billion. He said that the revenues of 2024 came to $ 91.1 billion. Business with Amazon represented 11.8% of this total.
The rapid development of UPS activities with Amazon was a surprise, said Daniel Imbro, analyst at Stephens Inc.
“This corresponds to their better, no bigger strategy,” said Iri by e-mail. “But it seems to be a wind from profits, given the lack of growth in underlying income.”
UPS shares have dropped from 18% to $ 109.92 at 11:13 am in New York, the most steep intra-e-ie since October 10, 2008. This has followed a decline of 20% in 2024, which marked a third year of decline. Amazon dropped 1.8% to $ 232.71.
Tomé’s troubled mandate
UPS actions have lost half of their value since the beginning of 2022 and are close to where they exchanged when Tomé took office as CEO in June 2020 at the beginning of the cobed epidemic. After driving a peak in home delivery request at the start of his mandate, UPS suffered from the drop in higher margins and costs. Tomé also deals with the repercussions of the generous UPS agreement with his union in 2023, which increased its labor costs and forced the company to reduce its profit prospects.
