UPS quarterly revenue and profit drop on China tariffs; shares fall
Shares of the delivery giant dropped nearly 3% before the bell.
The company did not update its full-year revenue or operating profit outlook for a second straight quarter, citing ongoing macroeconomic uncertainty. In its last forecast, issued in January, UPS projected 2025 revenue of $89 billion.
The White House in May began collecting tariffs on shipments under $800 from China that were previously duty-free. While those levies were reduced to 54% from 120% as part of a trade truce, consumer demand is still expected to take a hit.
Experts say the removal of the exemption likely creates a greater-than-expected volume headwind for the company, as customers may cut back on discretionary online purchases, reducing shipments from bargain e-commerce sellers such as Temu (PDD.O), opens new tab and Shein on UPS's most profitable China-U.S. trade lines.
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.
Atlanta-based UPS reported consolidated revenues of $21.2 billion, compared with $21.8 billion last year.
Revenue in its U.S. domestic segment declined to $14.08 billion from $14.20 billion, pressured by a sluggish recovery in retail sales and industrial activity.
The company reported adjusted net income of $1.55 per share for the quarter ended June 30, from $1.79 per share a year earlier.
UPS has been shuttering hundreds of facilities and slashing thousands of jobs as part of a sweeping overhaul, its largest ever, aimed at generating $3.5 billion in cost savings in 2025.
In April, the company announced plans to cut 20,000 jobs due to shedding half of its shipping volume from Amazon.com (AMZN.O), opens new tab, its largest customer.
UPS in July said it was offering voluntary buyouts to its unionized full-time drivers for the first time.
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