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UPS Dividend Hits 7.5% as Cost Cuts and Amazon Pullback Raise Payout Questions

UPS borrows to cover a cash-flow gap, targeting $3.5 billion in savings this year.

Overview

  • Shares have fallen roughly one-third over the past year and more than 60% since early 2022, lifting the dividend yield to about 7.5%.
  • Second-quarter revenue slipped nearly 3% to $21.2 billion and adjusted earnings fell 13% to $1.55 per share.
  • First-half free cash flow totaled $742 million versus $2.7 billion of dividend payments, leaving a shortfall the company filled with more debt.
  • Long-term debt and finance leases rose to $23.8 billion, with cash above $6 billion and bond ratings reported at A2/A.
  • UPS plans to cut Amazon-related volumes by more than 50% by the second half of next year and targets $3.5 billion in annual savings, with most benefits expected in the second half of this year and stronger cash generation forecast for 2026.