UPS Shares Move South After Q2 Earnings Miss Estimates

United Parcel Service, Inc. (UPS) reported mixed second-quarter 2025 results wherein the company’s earnings missed the Zacks Consensus Estimate but revenues outpaced the mark.

Quarterly earnings per share of $1.55 missed the Zacks Consensus Estimate by a penny and declined 13.4% year over year. Revenues of $21.2 billion surpassed the Zacks Consensus Estimate of $20.8 billion but decreased 2.7% year over year.

Citing the current macro-economic uncertainty, UPS did not unveil any revenue or operating profit guidance for 2025.

Apart from missing earnings expectations, UPS reported a year-over-year decline in both earnings and revenues. This, coupled with no guidance update for revenue or operating profit guidance for 2025, has displeased investors. As a result, UPS stock was down in early trading.

Carol Tomé, UPS chief executive officer, stated, “Our second quarter results reflect both the complexity of the landscape and the strength of our execution. We are making meaningful progress on our strategic initiatives, and we’re confident these actions are positioning the company for stronger long-term financial performance and enhanced competitive advantage."

Other Aspects of Q2 Earnings Report

U.S. Domestic Package revenues of $14.08 billion declined 0.8% year over year, owing to the expected decline in volume, partially offset by increases in air cargo and revenue per piece. The actual segmental sales figure was higher than our estimation of $13.86 billion. Segmental operating profit (adjusted) fell 1.4% year over year to $982 million. The adjusted operating margin for the segment was 7%.

Revenues in the International Package division totaled $4.48 billion, which increased 2.6% year over year, owing to a 3.9% increase in average daily volume. The actual segmental sales figure was higher than our estimation of $4.28 billion. Segmental operating profit (adjusted) totaled $682 million, down 17.2% year over year. The adjusted operating margin for the segment was 15.2%.

Supply Chain Solutions’ revenues of $2.65 billion decreased 18.3% year over year, owing to the impact of the third quarter of 2024 divestiture of Coyote. The actual segmental sales figure was below our estimation of $2.82 billion. Operating profit (on an adjusted basis) fell 13.1% year over year to $212 million. The adjusted operating margin for the segment was 8%.

The overall adjusted operating margin was 8.8%.

Other Aspects of UPS’ 2025 Outlook

UPS is affirming 2025 guidance for the following metrics.

Capital expenditures are estimated to be around $3.5 billion, with dividend payments expected to be around $5.5 billion (subject to board approval) and share repurchases of around $1.0 billion (which have been completed).

The effective tax rate is expected to be around 23.5%.

UPS expects to witness $3.5 billion in reductions in expenses due to its network reconfiguration and Efficiency Reimagined initiatives.

Currently, UPS carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Q2 Performances of Other Transportation Companies

Delta Air Lines (DAL) reported second-quarter 2025 earnings (excluding $1.17 per share from non-recurring items) of $2.10 per share, which beat the Zacks Consensus Estimate of $2.04. Earnings decreased 11% on a year-over-year basis due to high labor costs.

Revenues in the June-end quarter were $16.65 billion, beating the Zacks Consensus Estimate of $16.2 billion and decreasing marginally on a year-over-year basis. Adjusted operating revenues (excluding third-party refinery sales) increased 1% year over year to $15.5 billion. 

J.B. Hunt Transport Services, Inc. (JBHT) reported second-quarter 2025 earnings of $1.31 per share, which missed the Zacks Consensus Estimate of $1.34 and declined 0.8% year over year.

Total operating revenues of $2.93 billion missed the Zacks Consensus Estimate of $2.94 billion and were flat year over year. JBHT’s second-quarter revenue performance witnessed a 6% increase in Intermodal (JBI) loads, a 13% increase in Truckload (JBT) loads, a 3% increase in Dedicated Contract Services (DCS) productivity and a 6% increase in Integrated Capacity Solutions (ICS) revenue per load. These items were offset by Final Mile Services revenue declining 10%, lower revenue per load in both JBI and JBT, a 9% decrease in ICS load volume and a 3% decline in average trucks in DCS. Total operating revenues, excluding fuel surcharge revenue, increased 1% on a year-over-year basis.

United Airlines Holdings, Inc. (UAL) reported mixed second-quarter 2025 results wherein the company’s earnings beat the Zacks Consensus Estimate, but revenues missed the same.

UAL's second-quarter 2025 adjusted earnings per share (excluding 90 cents from non-recurring items) of $3.87 surpassed the Zacks Consensus Estimate by a penny but declined 6.5% on a year-over-year basis. The reported figure lies within the guided range of $3.25-$4.25.

Operating revenues of $15.2 billion fell short of the Zacks Consensus Estimate of $15.4 billion but increased 1.7% year over year. Passenger revenues (which accounted for 90.8% of the top line) increased 1.1% year over year to $13.8 billion. UAL flights transported 46,186 passengers in the second quarter, up 4.1% year over year.

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