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UPS shares tank 15% after weak guidance, plan to slash Amazon deliveries by more than half

Shares of United Parcel Service plunged more than 15% Thursday after the company issued weak revenue guidance for the year and said it planned to cut deliveries for Amazon, its largest customer, by more than half.

The shipping giant said in its fourth-quarter earnings report that it "reached an agreement in principle with its largest customer to lower its volume by more than 50% by the second half of 2026."

At the same time, UPS said it's reconfiguring its U.S. network and launching multi-year efficiency initiatives that it expects will result in savings of approximately $1 billion.

UPS CEO Carol Tome said on a call with investors that Amazon is UPS' largest customer, but it's not the company's most profitable customer. "Its margin is very dilutive to the U.S. domestic business," she added.

"We are making business and operational changes that, along with the foundational changes we've already made, will put us further down the path to become a more profitable, agile and differentiated UPS that is growing in the best parts of the market," Tome said in a statement.

Amazon spokesperson Kelly Nantel told CNBC in a statement that UPS had requested a reduction in volume "due to their operational needs."

"We certainly respect their decision," Nantel said in a statement. "We'll continue to partner with them and many other carriers to serve our customers."

Amazon said before the UPS announcement that it had offered to increase UPS' volumes.

UPS forecast 2025 revenue of $89 billion, down from revenue of $91.1 billion in 2024. That's well below consensus estimates for 2025 revenue of $94.88 billion, according to analysts polled by LSEG.

For the fourth quarter, UPS missed on revenue, reporting $25.30 billion versus $25.42 billion analysts

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