United Parcel Service Inc. (UPS) shares plunged after the company projected annual revenue well below expectations, telling investors that a long-awaited rebound in demand for its parcel services will not arrive this year.

UPS forecast $89 billion in revenue for 2025, falling short of analysts’ average expectations of $94.9 billion. I Photo: UPS
As a result, the company announced plans to significantly reduce its low-margin business with Amazon, Bloomberg News reporter Cailley LaPara wrote.
UPS' core parcel operations have endured a prolonged demand slump as package volumes have declined from pandemic-era peaks. Additionally, some customers have opted for economy services over premium options, cutting into the Atlanta-based company’s earnings.
To adapt, UPS aims to prioritize higher-margin packages and reduce less profitable deliveries. On Thursday, the company announced an agreement with Amazon to lower package volumes by more than 50% by the second half of 2026.
“Amazon is our largest customer, but it’s not our most profitable customer,” CEO Carol Tomé told investors during a conference call. Amazon confirmed that it will ship fewer parcels with UPS, despite initially requesting to increase its shipping volume with the courier.
“We’ll continue to partner with them and many other carriers to serve our customers,” Amazon spokesperson Kelly Nantel said in an emailed statement.
UPS forecast $89 billion in revenue for 2025, falling short of analysts’ average expectations of $94.9 billion. The company reported $91.1 billion in revenue for 2024, with business from Amazon accounting for 11.8% of that total. The rapid reduction in UPS’ Amazon business came as a surprise, said Daniel Imbro, an analyst at Stephens Inc.
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