United Parcel Service, Inc. Q4 FY2025 earnings call

Carol Tomé started by remembering those affected by the UPS flight crash. Fourth quarter results exceeded expectations with all segments contributing. In 2025, they reached volume reduction target with Amazon, delivered $3.5B in savings, closed 93 buildings, deployed automation. Launched digital access program growing 25% y/y. Completed acquisitions. In 2026, new relationship with USPS for Groundsaver, new air hub in Philippines slated for end 2026, expansion in Hong Kong on track. Brian Dykes discussed 2026 outlook, Amazon Glide Down, network reconfiguration, cost-out efforts, and segment details.

U.S. Domestic: Fourth quarter revenue $16.8B, down 3.2% y/y; ADV down 10.8%; revenue per piece up 8.3% y/y; operating profit $1.7B, operating margin 10.2%. International: Fourth quarter revenue $5B, up 2.5% y/y; ADV down 4.7%; operating profit $908M, down $154M y/y; operating margin 18%. Supply Chain Solutions: Fourth quarter revenue $2.7B, down $388M y/y; operating profit $276M, operating margin 10.3% up 100 basis points. Full year 2025: U.S. Domestic operating profit $4.6B, margin 7.7%; International operating profit $2.9B, margin 15.8%; Supply Chain Solutions operating profit $1.1B, margin 10.6%.

2026 consolidated revenue expected ~$89.7B, operating margin ~9.6%, diluted EPS flat to 2025. U.S. Domestic revenue expected flat y/y, ADV down mid-single digits, operating margin flat to 2025. International revenue growth low single digits, margin mid-teens. Supply Chain Solutions revenue up high single digits, margin low double digits.

Q: David Vernon asked about domestic margin and MD-11 retirement cost.

A: Brian Dykes discussed MD-11 incremental lease cost, margin pressure in first half, and go-forward algorithm.

Q: Tom Wadewitz asked about domestic pack margin and USPS cost.

A: Brian Dykes talked about rev per piece, cost per piece, and USPS cost benefit.

Q: Ken Hoexter asked about rate increases.

A: Brian Dykes discussed rev per piece growth and driver buyout.

Q: Ari Rosa asked about cost per piece trends.

A: Brian Dykes and Carol Tomé talked about cost per piece normalization and automation.

Q: Chris Wetherbee asked about international segment.

A: Brian Dykes and Kathleen Gutmann discussed international margin pressure and growth in Asia.

Q: Jordan Alliger asked about package growth.

A: Carol Tomé and Brian Dykes talked about market stabilization, mix shift, and RFID capability.

Q: Ravi Shanker asked about long-term earnings growth.

A: Carol Tomé said 2026 is pivotal.

Q: Bruce Chan asked about facility automation.

A: Nando Cesarone and Carol Tomé talked about facility closure and automation.

Q: Richa Harnane asked about CapEx plans.

A: Carol Tomé and Brian Dykes discussed CapEx reduction and network efficiency.

Q: Jason Seidl asked about technology redirecting parcels to USPS.

A: Nando Cesarone and Matthew Guffey talked about technology and product portfolio.

Q: Bascome Majors asked about labor inflation.

A: Carol Tomé and Brian Dykes talked about network progress and labor cost impact.

Q: Brandon Oglenski asked about market share.

A: Carol Tomé talked about service and capabilities for market share.