Shares of United Parcel Service (NYSE: UPS) have declined sharply from their record high of $192.88 set on February 2, 2022. The stock now trades around $107, representing a drop of approximately 45% from that peak.
Package volumes at UPS have decreased in recent years. Average daily shipments fell from 25.25 million in 2021 to 19.97 million in the first nine months of 2025. Total revenue dropped from $97.29 billion in 2021 to $64.18 billion over the same nine-month period in 2025.
Operating margins have also contracted. The company's adjusted operating margin shrank from 13.5% in 2021 to 6.8% in the first nine months of 2025. Diluted earnings per share plummeted from $14.68 to $4.46 during this timeframe.
The company has been reducing its volume of lower-margin orders, particularly from its top customer Amazon (NASDAQ: AMZN). This strategy has increased average revenue per piece but contributed to the overall decline in shipment numbers.
In 2024, UPS signed a new contract with the Teamsters union to avoid a strike. However, the agreement brought higher labor and pension costs that further pressured profitability.
A significant development occurred last November when the Federal Aviation Administration grounded all of UPS's MD-11 aircraft indefinitely following a deadly crash in Louisville, Kentucky. This grounding, which happened during the peak holiday season, has strained the company's logistics network and forced rerouting of deliveries.
Analysts currently expect UPS's revenue and earnings per share to each decline by 3% in 2025. For 2026, they project roughly flat revenue with a potential 7% increase in earnings per share from margin initiatives.
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