Quarterly financial snapshot

UPS reported third-quarter 2025 consolidated revenue of $21.4 billion, a decline of 3.7% from a year earlier. Basic earnings per share came in at $1.74, topping Wall Street's estimate of $1.29 but down $0.24, or 13.4%, year over year. Total operating profit was $1.8 billion, a decrease of 9.1% compared with the prior year.

CEO overview on tariffs and strategic focus

Chief Executive Officer Carol Tomé said the quarter was shaped by a mix of expected and unexpected tariff shifts that the company managed through active operational responses. She highlighted continued emphasis on improving revenue quality through pricing and reiterated that the firm is in the midst of a major U.S. network reconfiguration to position the business for the future.

Tomé praised UPS employees for maintaining service while the company rebalances its portfolio, and described 2025 as a year of profound trade-policy change that affected higher-margin export lanes.

Amazon glide-down and network adjustments

UPS said the volume it handles for Amazon fell 21.2% in the third quarter, a sharper decline than the roughly 13% reduction averaged in the first half of the year. The company is intentionally reducing lower-yielding e-commerce volume as part of its revenue-quality strategy.

As part of the U.S. network reconfiguration, UPS closed an additional 19 facilities in the quarter, bringing the total closures this year to 93. The company also completed a voluntary retirement program for many long-tenured drivers, and said its network reconfiguration and cost-reduction initiatives remain on schedule with profit improvement from the Amazon glide-down proceeding as planned.

International performance and trade-policy impacts

On the international front, UPS reported that export average daily volume (ADV) rose 5.9% year over year, marking the fifth straight quarter of export ADV growth. Despite that increase, Tomé noted that recent trade-policy changes reduced volumes in higher-margin lanes, creating headwinds for international revenue mix.

Ground Saver product and USPS discussions

The company said volume for its Ground Saver product (formerly SurePost) fell 32.7% year over year, driven largely by actions tied to Amazon and deliberate reductions in lower-yielding e-commerce shipments. UPS indicated it has reached a preliminary understanding with the U.S. Postal Service on revenue and rates to support last-mile delivery for Ground Saver, and expressed confidence a final agreement can be reached that maintains service levels.

Peak season outlook and Network of the Future

UPS expects roughly 80% of its peak seasonal surge to be driven by its top 100 customers. Early indications from those customers point to a solid peak season, though total U.S. peak average daily volume is still expected to be down year over year because of the Amazon glide-down.

Operationally, the company pointed to enhancements from its Network of the Future program that it says will reduce reliance on seasonal hires, lease trailers, vehicles and aircraft while increasing automation. The company has deployed new automated systems in 35 facilities and expects about 66% of volume to flow through automated processes in the fourth quarter, up from 63% in the comparable period last year.

Fourth-quarter guidance and CFO commentary on mix

UPS issued preliminary guidance for the fourth quarter calling for consolidated revenue of about $24 billion and a consolidated operating margin near 11%–11.5%. Chief Financial Officer Brian Newman said the company is improving volume mix across its network and that disciplined focus on revenue quality significantly offset the revenue impact from lower overall volume.

Newman provided detail on customer and channel trends: small and medium-sized businesses (SMBs) saw average daily volume decline 2.2% year over year, but SMBs represented 32.8% of U.S. volume, a roughly 340-basis-point improvement versus last year. B2B ADV finished down 4.8% and accounted for 45.2% of U.S. volume, a 350-basis-point improvement, while B2C ADV declined 17.6%.

Analyst reaction and cost concerns

Analyst Jeff Kauffman of Vertical Research Partners warned that although UPS has been improving yield, the company faces a rapid pace of domestic volume decline that raises questions about sustainability. He emphasized the need for better control of cost inflation to shore up margins as volumes shift.