UPS Q2: Amazon Pullback and Network Overhaul Drive 12% Profit Growth
- Aug 1
- 1 min read
UPS Q2 volumes fell as it finished exiting low-margin Amazon business, but revenue and profit both rose: revenue hit $22.8 billion (+7.6% YoY) and adjusted operating profit rose 12% to $2.1 billion ($1.76/share), beating estimates. Full-year guidance was raised to $91.2 billion in revenue and $8.6 billion in adjusted operating profit. Shares still fell 6.5% on soft second-half guidance and larger-than-expected volume losses.
Over 18 months, UPS cut 2 million low-margin Amazon pieces per day ($4.5 billion in related expenses), closing 150 sort facilities and 30,000 positions while adding automation — 68.5% of U.S. volume now runs through automated facilities, at 28% lower cost per piece. Amazon is now about 9% of UPS revenue, down from a 13% Covid-era peak. CEO Carol Tomé called the overhaul "the foundation," saying remaining volume now carries better economics.
Domestic revenue rose 6% on a 9.3% revenue-per-piece gain despite a 3.3% volume decline. International revenue rose 12.5%, but profit there fell 7.2% to $623 million on fuel costs and Middle East rerouting. UPS is leaning into premium, higher-yield segments — small business, healthcare, industrial — over price competition: healthcare logistics revenue topped $3 billion for a second straight quarter, and RFID-enabled tracking (now on every package van) is helping win customers, including a high-end jeweler, on visibility alone. Tomé downplayed Amazon's growing logistics ambitions, saying UPS leads everywhere outside lightweight urban delivery.
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