UPS (UPS +0.21%) delivered a decent set of fourth-quarter results on Tuesday and announced a series of layoffs. Investors reacted by trading the logistics giant's shares marginally higher on the day, with their 0.2% gain slightly lagging the bellwether S&P 500 index's 0.4% increase.
A bullish reaction to fundamental declines
For its final frame of 2025, UPS booked total revenue of just under $24.5 billion, a 3% decline from the fourth quarter of 2024. Its operating profit not in accordance with generally accepted accounting principles (GAAP) fell by nearly 7% year-over-year to nearly $2.9 billion, or $2.38 per share.
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Both figures topped the consensus analyst estimates. Collectively, pundits tracking UPS stock were modeling slightly more than $24 billion in revenue and $2.20 per share for non-GAAP (adjusted) net income.
During the quarter, a crucial one for the company given that it included the holiday season, UPS experienced a 3% decline in its domestic segment, mainly due to lower shipment volume. On the other hand, revenue from its international operations rose at nearly the same percentage rate, thanks to a more than 7% increase in revenue per item shipped.
UPS also declared its latest quarterly dividend. At $1.64 per share, it matches the previous four distributions, and yields 6.1%.
The company said that it aims to reduce its workforce by as much as 30,000 this year. CFO Brian Dykes said the move "will be accomplished through attrition, and we expect to offer a second voluntary separation program for full-time drivers."
NYSE: UPS
Key Data Points
The Amazon Effect
UPS has been quite an underperforming stock since it and Amazon started to "decouple," their once-tight business relationship early last year. Investors generally don't like to see a top partner's business melt away, even if the arrangement wasn't particularly lucrative for UPS.
Given that, I'd say the company's results weren't bad, although they weren't overly impressive either. These days, UPS is basically an income stock, and as long as the company is able to (at least) maintain its present payout, the shares will be attractive.
