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UPS Turnaround Shows Early Traction Ahead of Jan. 27 Earnings

The Jan. 27 earnings report will test whether margin gains are taking hold.

Overview

  • Shares have rebounded nearly 30% over three months after a steep slide since 2022, leaving the dividend yield near 6.1%.
  • Management is exiting low-margin lines, cutting low-yield Amazon volume, and modernizing its network to prioritize profitability.
  • In Q3 FY2025, U.S. average daily volumes fell about 12% while revenue declined roughly 2.6% year over year, and margins improved.
  • Exposure to Amazon has been deliberately reduced to support margins, though the e-commerce company remains a significant customer.
  • Healthcare logistics is emerging as a growth driver, highlighted by three consecutive quarters of air volume growth and the Andlauer Healthcare Group acquisition.