UPS investor patience wears thin as courier cuts Amazon deliveries to boost margin

By design, UPS (UPS) is delivering acold less packages from Amazon (AMZN) arsenic it turns its attraction to higher-margin deliveries, similar those from tiny businesses.

But the strategy reset whitethorn inactive beryllium hard for UPS investors to swallow.

UPS CFO Brian Dykes said connected the company's archetypal 4th net telephone contiguous that "at the extremity of the archetypal quarter, Amazon made up 8.8% of our full revenue. That's down from, gosh, it was northbound of 13% not precise agelong ago. Really pleased with however we've partnered with Amazon connected this glide down."

He added that the courier's quality to process returns remains an advantage: "With our large reverse network, and the capabilities that we person for boxless, label-less returns, that narration with Amazon is conscionable going to proceed to grow."

The strategy successful a nutshell: In precocious January, UPS said it would destruct up to 30,000 jobs and unopen down different 24 facilities successful 2026 arsenic it reduces deliveries for Amazon.

UPS archetypal 4th by the numbers: It was different lackluster net time for UPS today. While the institution bushed connected net and income estimates, it lone reiterated its full-year outlook. And the earthy numbers weren't great: Adjusted operating profits came successful astatine $1.3 billion, down from $1.8 cardinal past year. Domestic income were besides soft.

UPS banal fell adjacent to 5%.

"We expect UPS volition respond negatively to the weaker-than-expected U.S. Domestic results successful 1Q26 which present necessitate an adjacent stronger ramp-up to scope the midpoint of the 2Q26 adjusted operating borderline guide," JPMorgan expert Brian Ossenbeck wrote successful a note.

Bottom line: The winding down of a ample measurement of Amazon concern astatine UPS continues to beryllium pugnacious successful the eyes of investors. Results haven't needfully reflected the absorption connected borderline maturation by having much economically viable deliveries and sending excess workers packing.

UPS has a batch to beryllium to investors successful the backmost fractional of the year. Its shares are up 6% successful the past year, underperforming FedEx's (FDX) 82% gain. Its rival has recovered occurrence successful its restructuring efforts, namely connected the disbursal line. The S&P 500 (^GSPC) is up 29% implicit this stretch.

Brian Sozzi is Yahoo Finance's Executive Editor and a subordinate of Yahoo Finance's editorial enactment team. Follow Sozzi connected X @BrianSozzi, Instagram, and LinkedIn. Tips connected stories? Email [email protected].

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