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The Zacks Consensus Estimate for the June-quarter earnings is pegged at $1.56 per share, implying a 12.9% decrease from the year-ago quarter’s reported number. The estimate has been revised downward by a cent over the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for revenues is pegged at $20.85 billion, indicating a decline of 4.4% from the year-ago quarter’s actuals.
UPS has an impressive earnings surprise history, as reflected in the chart below.
Image Source: Zacks Investment Research
Given this backdrop, let's examine the factors likely to influence UPS’ Q2 results
Shipping volumes at UPS are likely to have been hurt by geopolitical uncertainties and high inflation. Uncertainty over tariffs, supply chain instability, and other broader macroeconomic headwinds are likely to hurt results. We believe that more than the financial numbers, it is the guidance that investors will more closely watch.
Labor costs are likely to have been high, hurting United Parcel Service’s bottom-line performance in the June quarter. 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. We expect an update on the same on the conference call.
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. Apart from the tariff-induced economic uncertainties, UPS’ decision to reduce business with its largest customer, Amazon (AMZN - Free Report) , 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.
Low fuel costs are expected to have aided UPS’ bottom-line performance in the June-end quarter. We expect expenses on fuel to decrease 10.3% from second-quarter 2024 actuals. Crude oil has been struggling in 2025, with prices sliding to multi-month lows. Tariff concerns, weakening consumer confidence and production increase by OPEC+ have all contributed to this downward pressure.
Q2 Earnings Whispers for UPS
Our proven model does not conclusively predict an earnings beat for UPS this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the chances of an earnings beat, which is not the case here.
The company's Earnings ESP is -1.00%. This is because the Most Accurate Estimate is currently pegged at $1.55 per share, a cent below the Zacks Consensus Estimate.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Unimpressive Price Performance of UPS Stock
Shares of UPS have plunged 26% over the past six months compared with its Zacks Transportation—Air Freight and Cargo industry’s 21.3% decline. Rival FedEx's (FDX - Free Report) price performance is better than that of UPS.
6- Month Price Comparison
Image Source: Zacks Investment Research
Valuation Picture
On the basis of the forward 12-month Price/Sales (P/S), UPS shares are trading in line with the industry average. Rival FedEx is cheaper. FedEx currently has a Value Score of A, while UPS has a value score of B.
UPS’ P/S F12M Vs. Industry & FDX
Image Source: Zacks Investment Research
Investment Thesis for UPS Stock
Due to the decline in shipping demand, volumes at UPS have suffered. A slowdown in online sales in the United States, apart from a softness in global manufacturing activity, has been hurting the demand scenario.
Moreover, inflation continues to be on the higher side. Of late, U.S. markets have been characterized by a high degree of volatility amid uncertainty surrounding its trade policy and growing anxiety about a slowing economy.
Concerns over the sustainability of UPS’ dividends in this era of demand weakness represent a further challenge for this parcel delivery company. However, UPS’ expansion efforts look good.
What Should Investors Do With UPS Stock?
It is worth noting that the company has the brand and the network to continue generating steady cash flows in the long run. This makes UPS a compelling long-term player in the transportation space. However, the near-term headwinds, including the tariff-induced uncertainties, are hard to ignore. The combination of its weak current performance and an uncertain future casts a shadow over UPS’ prospects. Though the company has a solid track record of beating earnings estimates, it will be prudent for investors to stay away from investing in the stock for now and wait for the upcoming quarterly results to get more clarity on the company’s near-term prospects.
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Buy, Hold or Sell UPS Stock? Key Tips Ahead of Q2 Earnings
Key Takeaways
United Parcel Service (UPS - Free Report) is scheduled to report its second-quarter 2025 results on Tuesday, July 29, 2025.
The Zacks Consensus Estimate for the June-quarter earnings is pegged at $1.56 per share, implying a 12.9% decrease from the year-ago quarter’s reported number. The estimate has been revised downward by a cent over the past 60 days.
The Zacks Consensus Estimate for revenues is pegged at $20.85 billion, indicating a decline of 4.4% from the year-ago quarter’s actuals.
UPS has an impressive earnings surprise history, as reflected in the chart below.
Given this backdrop, let's examine the factors likely to influence UPS’ Q2 results
Shipping volumes at UPS are likely to have been hurt by geopolitical uncertainties and high inflation. Uncertainty over tariffs, supply chain instability, and other broader macroeconomic headwinds are likely to hurt results. We believe that more than the financial numbers, it is the guidance that investors will more closely watch.
Labor costs are likely to have been high, hurting United Parcel Service’s bottom-line performance in the June quarter. 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. We expect an update on the same on the conference call.
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. Apart from the tariff-induced economic uncertainties, UPS’ decision to reduce business with its largest customer, Amazon (AMZN - Free Report) , 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.
Low fuel costs are expected to have aided UPS’ bottom-line performance in the June-end quarter. We expect expenses on fuel to decrease 10.3% from second-quarter 2024 actuals. Crude oil has been struggling in 2025, with prices sliding to multi-month lows. Tariff concerns, weakening consumer confidence and production increase by OPEC+ have all contributed to this downward pressure.
Q2 Earnings Whispers for UPS
Our proven model does not conclusively predict an earnings beat for UPS this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the chances of an earnings beat, which is not the case here.
The company's Earnings ESP is -1.00%. This is because the Most Accurate Estimate is currently pegged at $1.55 per share, a cent below the Zacks Consensus Estimate.
UPS currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank stocks here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Unimpressive Price Performance of UPS Stock
Shares of UPS have plunged 26% over the past six months compared with its Zacks Transportation—Air Freight and Cargo industry’s 21.3% decline. Rival FedEx's (FDX - Free Report) price performance is better than that of UPS.
6- Month Price Comparison
Valuation Picture
On the basis of the forward 12-month Price/Sales (P/S), UPS shares are trading in line with the industry average. Rival FedEx is cheaper. FedEx currently has a Value Score of A, while UPS has a value score of B.
UPS’ P/S F12M Vs. Industry & FDX
Investment Thesis for UPS Stock
Due to the decline in shipping demand, volumes at UPS have suffered. A slowdown in online sales in the United States, apart from a softness in global manufacturing activity, has been hurting the demand scenario.
Moreover, inflation continues to be on the higher side. Of late, U.S. markets have been characterized by a high degree of volatility amid uncertainty surrounding its trade policy and growing anxiety about a slowing economy.
Concerns over the sustainability of UPS’ dividends in this era of demand weakness represent a further challenge for this parcel delivery company. However, UPS’ expansion efforts look good.
What Should Investors Do With UPS Stock?
It is worth noting that the company has the brand and the network to continue generating steady cash flows in the long run. This makes UPS a compelling long-term player in the transportation space. However, the near-term headwinds, including the tariff-induced uncertainties, are hard to ignore. The combination of its weak current performance and an uncertain future casts a shadow over UPS’ prospects. Though the company has a solid track record of beating earnings estimates, it will be prudent for investors to stay away from investing in the stock for now and wait for the upcoming quarterly results to get more clarity on the company’s near-term prospects.