Catenaa, Tuesday, April 28, 2026- UPS is delivering far fewer packages from Amazon as it turns its attention to higher-margin deliveries, but investors find it difficult to swallow.
UPS CFO Brian Dykes said on the company’s first-quarter earnings call today that “at the end of the first quarter, Amazon made up 8.8% of our total revenue. That’s down from, gosh, it was north of 13% not very long ago. Really pleased with how we’ve partnered with Amazon on this glide down.”
He added that the courier’s ability to process returns remains an advantage: “With our great reverse network, and the capabilities that we have for boxless, label-less returns, that relationship with Amazon is just going to continue to grow.”
In late January, UPS said it would eliminate up to 30,000 jobs and shut down another 24 facilities in 2026 as it reduces deliveries for Amazon.
It was another lackluster earnings day for UPS today. While the company beat on earnings and sales estimates, it only reiterated its full-year outlook. And the raw numbers weren’t great: Adjusted operating profits came in at $1.3 billion, down from $1.8 billion last year. Domestic sales were also soft.
UPS stock fell as much as 5% on Tuesday following the news report, but it is still up by over 5% so far this year.
“We expect UPS will react negatively to the weaker-than-expected US Domestic results in 1Q26, which now require an even stronger ramp-up to reach the midpoint of the 2Q26 adjusted operating margin guide,” JPMorgan analyst Brian Ossenbeck wrote in a note.
The winding down of a large volume of Amazon business at UPS continues to be tough in the eyes of investors. Results haven’t necessarily reflected the focus on margin growth by having more economically viable deliveries and sending excess workers packing.
UPS has a lot to prove to investors in the back half of the year. Its shares are up 6% in the past year, underperforming FedEx’s 82% gain. Its rival has found success in its restructuring efforts, namely on the expense line. The S&P 500 is up 29% over this stretch.
