UPS completed the Amazon business reduction and raised its performance guidance, but its stock price still fell 6.4%
Second-quarter financial results released by the services company on Tuesday showed that the company has strategically reduced its low-margin business. business, achieved both revenue and profit growth, and raised its full-year performance guidance. However, the company's stock price still fell about 6.4% in late trading on Tuesday due to market concerns about its profitability and future growth. The financial report showed that UPS’s second-quarter revenue was US$22.8 billion, a year-on-year increase of 7.6%, exceeding market expectations of US$21.8 billion. Adjusted earnings per share were $1.76, well ahead of expectations of $1.66. Net profit dropped sharply to US$604 million from US$1.28 billion in the same period last year due to transformation-related costs. The core of this performance is that the company has completed the strategic reduction of Amazon business. The CEO said that the company "successfully completed the decline plan of Amazon business volume as planned." Previously, Amazon's business once accounted for more than 13% of the company's revenue, but by the end of the first quarter it had dropped to 8.8%. Although the average daily domestic package volume in the United States fell by 3.3% as a result, by focusing on high-value customers such as small and medium-sized enterprises and improving the level of automation, domestic business revenue still increased by 6% to US$14.9 billion, and operating profit increased by 21%. Based on the strong momentum in the first half of the year, the company raised its full-year revenue forecast for 2026 to approximately US$91.2 billion, and adjusted earnings per share guidance to approximately US$7.22. Still, the market remains concerned about the company's transformation costs and declining profits from its international operations. The company accrued US$891 million in after-tax transformation expenses in the quarter, and operating profits from its international business also declined. In addition, some investors have expressed doubts about the company's ability to maintain its current earnings growth momentum.