(Reuters) -United Parcel Service on Thursday forecast 2025 revenue below expectations as the parcel delivery giant works to lower exposure to its largest customer, Amazon, and as other customers opt for cheaper, slower ground-based deliveries.
UPS’ shares fell 5% before the bell after the company said it had reached an agreement with Amazon — without naming the firm but referring to it as its largest customer — to cut volumes it transports with UPS by more than 50% by the second half of next year.
The move comes as Amazon has also been reducing its dependence on UPS as the e-commerce company continues to expand its own delivery network.
UPS forecast 2025 revenue of $89 billion, compared with the average analyst estimate of $94.88 billion, according to data compiled by LSEG.
It also forecast full-year revenue of $89 billion, compared with estimates of $94.88 billion.
UPS and rival FedEx have been cutting costs since customers switched to slower, cheaper deliveries in the wake of the early pandemic’s e-commerce boom.
Atlanta-based UPS also forecast full-year consolidated operating margin at 10.8%, an increase from the 9.8% it reported for 2024.
The company reported fourth-quarter revenue of $25.3 billion, missing estimates of $25.42 billion.
UPS reported an adjusted profit of $2.75 per share for the quarter ended Dec. 31, beating estimates of $2.53 per share.
(Reporting by Abhinav Parmar in Bengaluru and Lisa Baertlein in Los Angeles; Editing by Savio D’Souza, Arun Koyyur and Shounak Dasgupta)
Source: finance.yahoo.com