News / UPS sees decline in Q2 and refuses further guidance over 'uncertainty'

Photo: UPS

US integrator UPS today reported a second-quarter drop in revenues and profits, but declined to offer full-year guidance on the uncertainty caused by the tariffs.

The express giant said group revenues for the quarter came in at $21.1bn.

“Despite uncertainties around trade policies, in the second quarter, the overall US economy demonstrated continued resilience,” chief executive Carole Tome said.

“But our sector, specifically the US small package market, was unfavourably impacted by US consumer sentiment that was near historic lows.”

However, the company managed to offset some of the market weakness – its US domestic revenues were down just 0.8% year-on-year to $14.8bn, despite a 7.3% decline in the average daily volume (ADV) carried, while operating profit was essentially flat at $982m.

Chief financial officer Brian Dykes confirmed that much of the domestic volume drop was due to the ongoing “glide down” in Amazon volumes as UPS tried to move towards more profitable packages.

“When excluding Amazon, total air ADV increased 1.4%, driven by healthcare and hi-tech customers,” he said.

“When looking at the first six months of 2025, Amazon’s ADV declined 13% compared with last year.

“Now that we are in the second half of the year, we expect to accelerate the pace of Amazon volume decline to approximately 30% year over year in each of the third and fourth quarters,” he explained.

Revenues in its international segment, which saw average daily volume up 3.9% globally, increased 2.6% to $4.48bn, but adjusted operating profit was down 17%, to $682m, as it struggled to adjust to wild trading fluctuations brought on by the tariffs and the ending of de minimis, Ms Tome indicated.

“[On] our China-US tradelane, an increased tariff and the elimination of de minimis exceptions resulted in a year-over-year drop in average daily volume of 34.8% for the months of May and June.

“Our China to US tradelane is our most profitable and the volume decline here pressured our international operating margin,” she said.

However, she added that investments in other tradelanes had mitigated these transpacific woes.

“As an example, in the second quarter, we saw volume in our China to the rest of the world tradelanes increase by 22.4%. And we nearly doubled our capacity between India and Europe to meet the growing export demand,” she said.

Meanwhile, Mr Dykes said that during the quarter, UPS either cancelled or put on more than 100 flights as a result of shippers changing volumes due to tariffs.

Supply chain services revenues declined 18.3% year on year, to $2.65bn, largely due to the sale of Coyote in the third quarter last year, while the impact on operating profit was a 13% decline, to $212m.

And Ms Tome said the environment had become so uncertain that UPS was declining to forecast what its profits may look at the year-end.

“There’s so much uncertainty out there – we are building scenarios and the range of the scenarios, well… it’s wide enough to drive one of our 18-wheelers through, so we elected not to provide guidance.”

This is expected to change by the next quarterly results, she added.

“By the end of the third quarter, we think we’ll have more certainty on tariffs. We think we’ll have more certainty on peak. We think we’ll have more certainty on costs, so that we can come back and give guidance for the fourth quarter.”