Latest news with #CarolTome
Yahoo
31-07-2025
- Business
- Yahoo
BofA lowers UPS rating to Neutral on uncertain outlook, slow cost-cutting
-- Bank of America (BofA) Securities on Tuesday downgraded United Parcel Service Inc (NYSE:UPS) shares to Neutral from Buy, flagging a clouded outlook and slow progress on cost-cutting initiatives. The bank also cut its price objective on the stock to $98 from $115 and trimmed its earnings estimates for 2025 and 2026 by 4% and 9%, respectively. Analyst Ken Hoexter flagged several challenges contributing to the downgrade. These include 'a larger-than-expected small- to medium-sized business (SMB) volume deceleration, slower-than-anticipated cost takeout, and accelerating Amazon (NASDAQ:AMZN) business glide-down.' Higher-than-expected Ground Saver costs and delays in realizing benefits from the voluntary driver separation program also contributed to the revision. UPS withdrew its full-year revenue and profit targets earlier this year and again refrained from offering new guidance when it reported second-quarter results on Tuesday. CEO Carol Tome said the range of possible outcomes remains too wide, referencing peak season demand uncertainty, SMB volume pressure, and the ongoing impact of tariff policy. Despite maintaining a target of $3.5 billion in 2025 cost savings, UPS noted attrition linked to the Amazon volume wind-down has been slower than expected. Amazon volumes are now expected to drop 30% in the second half, after a 13% decline in the first half. The domestic segment is also facing margin compression due to wage pressures and weak SMB activity. BofA expects margins to fall to 5.5% in Q3, the third-lowest level in nearly three decades. UPS' second-quarter adjusted EPS came in at $1.55, slightly above BofA's estimate but down 13% year-over-year. Revenue fell 3% to $21.2 billion. Domestic margins also declined, while international operations showed resilience, with operating margins of 15.2%, beating expectations. BofA lowered its valuation multiple to 14x from 15x 2026 EPS to reflect 'rising uncertainty and earnings pressure.' 'With a 108% dividend payout ratio, we lower our dividend rating to 8 from 7 (same/lower from same/higher), as we enter the 3rd year of elevated payout ratio,' the analysts noted. Related articles BofA lowers UPS rating to Neutral on uncertain outlook, slow cost-cutting Risks Rising? Smart Money Dodged 46%+ Drawdowns on These High-Flying Names After soaring 149%, this stock is back in our AI's favor - & already +25% in July Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
30-07-2025
- Business
- Reuters
UPS profit lower than expected as US trade policy shifts
July 29 (Reuters) - United Parcel Service (UPS.N), opens new tab posted quarterly profit marginally below estimates on Tuesday and again declined to issue annual revenue and margin forecasts, deepening concerns that changing U.S. trade policy is weighing on the delivery giant. Shares in the world's largest parcel delivery firm fell more than 9% to $92.16 in early trading, after executives also said UPS will accelerate its plan to deliver fewer packages for (AMZN.O), opens new tab, its largest customer. UPS and rival FedEx (FDX.N), opens new tab are seen as bellwethers for the health of the global economy as they serve clients across industries and geographies. "Changes in trade policies are impacting global trade and demand. It will likely all settle down at some point, but for now, it is a very volatile environment," CEO Carol Tome said on the earnings call. Tariffs on China and the elimination of duty-free treatment on purchases from China-linked e-retailers like Temu (PDD.O), opens new tab and Shein contributed to the 34.8% drop in average daily volume during May and June. The China to U.S. trade lane is UPS' most profitable. Still-uncertain U.S. trade policy has frozen corporate decision making and driven consumer sentiment to new lows, hurting the small package delivery business that UPS dominates. UPS is now accepting retailer plans for its peak winter holiday shipping season when its daily volumes can easily double. In those plans, retailers signal expectations for consumer spending that underpins the nation's economic activity. Customers often submit preliminary peak season shipping plans by the end of August and final plans at the end of September, Tome said. Tome expects retailers to delay preliminary plans until September, "which is an indication that they too are having difficulty in forecasting demand for the holiday selling season." UPS reported an adjusted consolidated operating margin of 8.8% for the latest quarter, while that margin was 7% for its largest domestic segment - below the 10%-plus analysts and investors had come to expect. The company did not provide closely watched revenue and margin forecasts, citing ongoing macroeconomic uncertainty. In January, UPS projected 2025 revenue of $89 billion. In a hit to demand, the White House in May began collecting tariffs on shipments under $800 from China that were previously duty-free, though the "de minimis" levies were later reduced to 54% from 120% as part of a trade truce. Analysts at J.P. Morgan have previously noted that negative impact from the removal of the de minimis exemption seems to impact UPS more than FedEx. Atlanta-based UPS reported consolidated revenues of $21.2 billion, above Wall Street estimates of $20.86 billion, helped by strength in its international segment, as importers likely frontloaded finished goods ahead of expected tariff changes. However, revenue in its U.S. segment fell to $14.08 billion from $14.20 billion, pressured by a sluggish recovery in retail sales and industrial activity. Adjusted net income was $1.55 per share for the quarter ended June 30, below estimates of $1.56 per share, according to data compiled by LSEG. UPS has been shuttering hundreds of facilities and slashing thousands of jobs as part of a sweeping overhaul, its largest ever, aimed at slashing $3.5 billion in costs in 2025. In April, the company announced plans to cut 20,000 jobs tied to plans to shed half its shipping volume from In July UPS offered voluntary buyouts to its unionized full-time drivers for the first time. As many as 85% of UPS drivers are at the top end of the UPS pay scale, with 25 to 40 years of service, executives said.
Yahoo
29-07-2025
- Business
- Yahoo
Why UPS Stock Is Down Big Today
Key Points UPS reported mixed results, with revenue falling year over year but topping expectations. The company's earnings momentum has been slowed by the impact of trade uncertainty. This should be a long-term winner, but it is hard to see things turning around quickly. 10 stocks we like better than United Parcel Service › United Parcel Service (NYSE: UPS) missed earnings expectations and provided no full-year guidance due to ongoing macro uncertainty. Investors are racing for the exits, sending UPS shares down 10% as of 11 a.m. ET. Trade wars take their toll It has been a difficult few years for transportation companies. In 2024, fears about a slowing economy and higher interest rates caused large shippers to trim inventory levels, leading to less demand. The new year brought new uncertainty as tariffs and trade wars disrupted normal shipping patterns. UPS sees no end in sight. The company earned $1.55 per share in the quarter, missing the $1.57-per-share consensus and declining from $1.79 per share a year ago. Revenue came in at $21.2 billion, down 3% year over year but slightly ahead of expectations. CEO Carol Tome in a statement said the company continues to operate in "a dynamic and evolving trade environment." The company provided no full-year revenue or operating profit guidance but did say it expects about $3.5 billion in capital expenditures and $1 billion in share repurchases. The share repurchases for the year have already been completed. Is UPS a buy? UPS is now off 26% year to date. The company is an essential cog in the global transportation network and should rebound eventually as trade flows eventually normalize. The question is when that will happen. So far in 2025, betting on a recovery has been a losing proposition, and with UPS not even offering guidance, it appears management sees no end in sight. Investors buying in now get a 7% dividend yield, but they will likely need a lot of patience as the macro situation plays out. Should you invest $1,000 in United Parcel Service right now? Before you buy stock in United Parcel Service, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and United Parcel Service wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $633,452!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,083,392!* Now, it's worth noting Stock Advisor's total average return is 1,046% — a market-crushing outperformance compared to 183% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 29, 2025 Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends United Parcel Service. The Motley Fool has a disclosure policy. Why UPS Stock Is Down Big Today was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Globe and Mail
07-07-2025
- Business
- Globe and Mail
UPS Looks to Cut Costs to Mitigate Demand Woes: What's the Road Ahead?
It is no secret that United Parcel Service 's UPS bottom line is being hurt by high costs, mainly on the labor front. High labor costs, in addition to softness concerning parcel volumes, are hurting the company's operations. Geopolitical uncertainty and high inflation continue to hurt consumer sentiment and growth expectations. The weak demand scenario due to the economic slowdown has led to a decline in the volume of packages shipped. Faced with these headwinds, the company is focusing on cutting costs. As part of this exercise, UPS is offering buyouts to delivery drivers for the first time in its 117-year history. UPS' full-time drivers are eligible for this offer. The company reportedly aims to trim its workforce by 20,000 this year, representing approximately 4% of the global workforce and shut 73 facilities to streamline operations and lower labor costs. Notably, expenses on compensation and benefits increased 2.1% year over year in 2024. The same is expected to decrease 2.6% in 2025 from 2024 levels, as per our model. Apart from the tariff-induced economic uncertainties, UPS' decision to reduce business with its largest customer, Amazon AMZN, contributed to the decision to trim the workforce. UPS' management has reached an agreement in principle with Amazon to lower the latter's volume by more than 50% by June 2026. According to Carol Tome, UPS' chief executive officer, Amazon was not its most profitable customer. UPS' rival FedEx FDX is also cutting costs to combat the weak demand scenario. FedEx reportedly will lay off more than 480 employees as it reshuffles operations through the Network 2.0 initiative. In the second quarter of 2023, FedEx announced DRIVE, a comprehensive program to improve its long-term profitability. The DRIVE program resulted in $1.8 billion in permanent savings in fiscal 2024. The program resulted in further $2.2 billion cost savings in fiscal 2025. These cost reduction initiatives include reducing flight frequencies, parking aircraft and cutting staff. For fiscal 2026, management expects to achieve $1 billion of transformation-related savings, which includes DRIVE and Network2.0. UPS' Price Performance, Valuation & Estimates Shares of UPS have declined in excess of 24% in a year, underperforming its industry. From a valuation standpoint, UPS trades at a 12-month forward price-to-earnings ratio of 13.91X, making it expensive compared with industrial levels. The Zacks Consensus Estimate for UPS' 2025 and 2026 earnings has been revised downward over the past 30 days. UPS' Zacks Rank UPS currently carries a Zacks Rank #4 (Sell). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Only $1 to See All Zacks' Buys and Sells We're not kidding. Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent. Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators, and more, that closed 256 positions with double- and triple-digit gains in 2024 alone. See Stocks Now >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Inc. (AMZN): Free Stock Analysis Report United Parcel Service, Inc. (UPS): Free Stock Analysis Report FedEx Corporation (FDX): Free Stock Analysis Report
Yahoo
04-07-2025
- Business
- Yahoo
UPS Makes 117-Year History With Employees Decision
United Parcel Service is rolling out an offer never seen before in its 117-year history. It was reported Thursday that UPS is offering buyouts to delivery drivers because it's navigating through "an unprecedented business landscape." The company currently has around 330,000 drivers. Their full-time drivers are eligible for this buyout. According to The Wall Street Journal, the average full-time driver for UPS makes around $170,000 annually. That was agreed to in the 2023 deal that UPS made with the Teamsters. The labor union isn't pleased with this week's buyout offer from UPS. They said their offer is far less than what members could make under their current deal. "UPS is trying to weasel its way out of creating good union jobs here in America by dangling insulting buyouts in front of Teamsters drivers. It is an illegal violation of our national contract," Teamsters general president Sean M. O'Brien said. "UPS is obligated to establish tens of thousands of new full-time jobs under the agreement. But CEO Carol Tomé and UPS's corporate managers are hoping that if they offer paltry severance packages to enough workers, no one will notice the company is setting the union's contract on fire. UPS Teamsters work too damn hard to be treated with such disrespect." O'Brien added, "UPS needs to live up to the existing contract. They must honor their commitments, just as Teamsters do every day, reliably delivering packages to hundreds of millions of Americans. Profits are not more important than people, not at UPS or any other employer." UPS, meanwhile, claims it remains committed to its 2023 contract despite its buyout program. UPS Makes 117-Year History With Employees Decision first appeared on Men's Journal on Jul 3, 2025
