NYSE:UPS
UNITED PARCEL SERVICE INC
A global logistics powerhouse providing essential time-sensitive transportation and supply chain solutions to businesses and consumers worldwide.
Key Metrics
Investment Thesis
Bull Case
UPS offers a defensive investment profile with predictable cash flows essential for businesses needing reliable logistics during economic downturns. The company's robust balance sheet allows it to weather inflationary pressures while maintaining its dominant market position in the premium delivery segment. Consistent execution on cost management and digital transformation initiatives could drive future margin expansion once volume growth stabilizes.
Bear Case
The decline in revenue over the last three years indicates a lack of top-line growth momentum in an already mature industry with limited expansion potential. High capital intensity and exposure to fluctuating fuel costs compress operating margins, making earnings volatile against macroeconomic shifts. The recent reduction in net income suggests that current pricing power may be insufficient to offset rising operational expenses and volume declines.
About UNITED PARCEL SERVICE INC
UNITED PARCEL SERVICE INC (NYSE: UPS) is a global leader in logistics, transportation, and supply chain management, operating primarily in North America, Europe, Asia-Pacific, and Latin America. The company offers time-definite delivery solutions for business and residential customers alongside specialized ground and air freight services. Its diversified revenue streams stem from its extensive network of sorting facilities, fleet operations, and technology-driven tracking systems.
Analysis
Management Discussion
Recent financial performance shows a slight contraction in revenue to $88.66B compared to 2024, while net income decreased to $5.57B from $5.78B the prior year, reflecting challenging macroeconomic headwinds. Despite lower operating profit margins, strong cash flow from operations of $8.45B demonstrates the company's ability to generate liquidity even amidst revenue pressure. The management has balanced significant capital expenditures of $3.69B with substantial share repurchases and dividends to support shareholder returns.
Industry Overview
The global logistics industry is undergoing a structural transformation driven by the rise of e-commerce and the demand for faster, more transparent delivery networks. Companies are increasingly competing on speed and supply chain visibility rather than just price, leading to consolidation among smaller players. UPS is well-positioned to capture value from this shift but faces intense competition from regional carriers and technology-enabled disruptors.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $100.34B | $90.96B | $91.07B | $88.66B |
| Cost of Revenue | $0 | $0 | $0 | $0 |
| Gross Profit | $100.34B | $90.96B | $91.07B | $88.66B |
| Operating Expenses | $87.24B | $81.82B | $82.60B | $80.79B |
| Operating Income | $13.09B | $9.14B | $8.47B | $7.87B |
| Stock-Based Comp | $1.57B | $220.0M | $24.0M | $73.0M |
| D&A | $3.19B | $3.37B | $3.61B | $3.00B |
| Depreciation | $76.0M | — | — | — |
| Amortization | $525.0M | $597.0M | $648.0M | $700.0M |
| Non-Operating Income | $1.73B | $-568.0M | $-1.03B | $-703.0M |
| Interest Expense | $704.0M | $785.0M | — | — |
| Pre-Tax Income | $14.82B | $8.57B | $7.44B | $7.16B |
| Income Tax | $3.28B | $1.86B | $1.66B | $1.59B |
| Continuing Ops | $11.55B | $6.71B | $5.78B | $5.57B |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $11.55B | $6.71B | $5.78B | $5.57B |
| Minority Interest | $0 | $0 | $0 | $0 |
| Net to Common | $11.55B | $6.71B | $5.78B | $5.57B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $22.22B | $19.41B | $19.31B | $19.05B |
| Cash & Equivalents | $5.60B | $3.21B | $6.11B | $5.89B |
| Marketable Securities | $1.99B | $2.87B | $206.0M | — |
| Accounts Receivable | $12.58B | $11.22B | $10.87B | $11.21B |
| Inventory | $889.0M | $935.0M | $826.0M | $739.0M |
| Other Current Assets | $1.15B | $1.19B | $1.29B | $1.21B |
| Long-Term Assets | $48.91B | $51.44B | $50.76B | $54.05B |
| PP&E (Net) | $34.72B | — | — | — |
| Intangibles | $2.80B | $3.31B | $3.06B | $4.02B |
| Goodwill | $4.22B | $4.87B | $4.30B | $5.84B |
| Operating Leases | $3.75B | $4.31B | $4.15B | $4.26B |
| Other LT Assets | $3.16B | $38.66B | $38.94B | $39.67B |
| Total Assets | $71.12B | $70.86B | $70.07B | $73.09B |
| Current Liabilities | $18.14B | $17.68B | $16.44B | $15.62B |
| Accounts Payable | $7.51B | $6.34B | $6.30B | $6.63B |
| Current Debt | $2.34B | — | — | — |
| Current Leases | $621.0M | $709.0M | $733.0M | $763.0M |
| Deferred Revenue | $11.0M | $20.0M | $13.0M | $0 |
| Other Current Liab | $7.66B | $10.61B | $9.39B | $8.22B |
| Long-Term Liabilities | $33.18B | $35.87B | $36.89B | $41.22B |
| Long-Term Debt | $17.32B | — | — | — |
| LT Operating Leases | $3.24B | $3.76B | $3.63B | $3.70B |
| Other LT Liab | $12.60B | $32.09B | $33.22B | $37.47B |
| Total Liabilities | $51.32B | $53.54B | $53.33B | $56.84B |
| Shareholders' Equity | $19.80B | $17.31B | $16.74B | $16.25B |
| Retained Earnings | $21.33B | $21.05B | $20.88B | $20.15B |
| AOCI | $-1.55B | $-3.76B | $-4.31B | $-4.21B |
| Treasury Stock | $13.0M | — | — | — |
| Total L&E | $71.12B | $70.86B | $70.07B | $73.09B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $11.55B | $6.71B | $5.78B | $5.57B |
| Non-Cash Adjustments | $2.54B | $6.39B | $3.03B | $3.07B |
| Working Capital Changes | $15.0M | $-2.86B | $1.31B | $-194.0M |
| Cash from Operations | $14.10B | $10.24B | $10.12B | $8.45B |
| Capital Expenditures | $4.77B | $5.16B | $3.91B | $3.69B |
| Cash from Investing | $-7.47B | $-7.13B | $-217.0M | $-4.74B |
| Debt Issuances | $0 | $3.43B | $2.79B | $4.15B |
| Debt Repayments | $2.30B | $2.43B | $2.49B | $2.07B |
| Share Buybacks | $3.50B | $2.25B | $500.0M | $1.00B |
| Dividends Paid | $5.11B | $5.37B | $5.40B | $5.40B |
| Cash from Financing | $-11.19B | $-5.53B | $-6.85B | $-4.14B |
| FX Effect | $-100.0M | $33.0M | $-149.0M | $201.0M |
| Net Change in Cash | $-4.65B | $-2.40B | $2.91B | $-225.0M |
| Beginning Cash | $10.26B | $5.60B | $3.21B | $6.11B |
| Ending Cash | $5.60B | $3.21B | $6.11B | $5.89B |
Frequently Asked Questions
How does UNITED PARCEL SERVICE INC make money?
The company's revenue is driven by its Transportation & Logistics segment (ground and air package delivery), the Supply Chain Solutions segment offering contract logistics services like warehousing, and its Global Freight division which manages less-than-truckload and full-truckload freight for commercial clients.
What are the main risks for UPS?
Global economic slowdowns can reduce commercial volume and residential e-commerce growth rates impacting revenue. Rising fuel prices and labor shortages pose significant margin pressure on the capital-intensive transportation business. Geopolitical instability or trade restrictions in key markets like China could disrupt international freight volumes and increase operational costs.
What is UPS's competitive advantage?
UPS maintains a massive physical footprint with over 200 service locations globally and a dense domestic hub network that ensures speed and reliability. The company leverages proprietary technology to optimize route efficiency and real-time tracking, creating high switching costs for enterprise clients. Its integrated ecosystem allows seamless movement of goods across modes of transport, offering a one-stop solution that pure-play competitors struggle to match.
Related Companies
Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.