April 28 (Reuters) – United Parcel Service reported a 28% drop in quarterly adjusted profit, as it scaled back deliveries for top client Amazon.com to focus on higher-margin shipments for healthcare and data center companies.
Shares of the company dropped 3% in pre-market trading after Atlanta-based UPS reported adjusted net income of $1.07 per share for the three months ended March 31, compared with $1.49 per share a year earlier.
Quarterly revenue at the world’s largest parcel delivery firm also dropped 1.6% to $21.2 billion.
The company, however, maintained its forecast of a 1.2% rise in 2026 revenue and an adjusted operating margin of about 9.6%.
UPS and its rival FedEx are slashing costs, pulling back from margin-eroding doorstep deliveries and ramping up automation at sorting hubs as they vie for more lucrative shipments such as temperature-controlled and time-critical goods.
The strategic shift comes as U.S. logistics firms have been under pressure over the past year from changing trade policies, notably the loss of duty-free “de minimis” treatment for low-value e-commerce shipments tied to China‑linked discount sellers such as Shein and Temu.
(Reporting by Nandan Mandayam in Bengaluru; Editing by Anil D’Silva)
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