UPS Shares Rise Despite Pulling Full-Year Guidance on Tariff Uncertainty

United Parcel Service Inc. (UPS.US) shares climbed 4.5% in premarket trading Tuesday after the package delivery giant withdrew its full-year financial guidance amid economic uncertainty created by President Donald Trump's tariff policies, despite posting better-than-expected first-quarter results.

Q1 Results Beat Expectations Despite Revenue Decline

UPS reported first-quarter adjusted earnings of $1.49 per share, up 4.2% from $1.43 per share a year earlier and above the analyst estimate of $1.40. Revenue slightly declined 0.9% to $21.5 billion but still exceeded the projected $21.02 billion forecast. Consolidated operating profit increased 3.3% to $1.7 billion compared to the first quarter of 2024.

Earnings vs Estimates. Source: Bloomberg L.P.

Segment Performance Shows Mixed Results

The company's U.S. package segment saw revenue increase 1.6% to $14.46 billion, outperforming the estimated $14.2 billion. International package revenue also grew 2.7% to $4.37 billion, beating expectations of $4.27 billion. However, Supply Chain Solutions revenue declined significantly, falling 16% to $2.71 billion.

Guidance Withdrawal Reflects Broader Economic Concerns

UPS withdrew its previous 2025 outlook, which had projected revenue of about $89 billion and a full-year operating margin around 10.8%, citing "current macroeconomic uncertainty." The decision highlights widespread concerns across corporate America following the Trump administration's announcements of large tariffs on imports, which have prompted other companies including American Airlines and Skechers to pull their outlooks.

"As a trusted leader in global logistics, we will leverage our integrated network and trade expertise to assist our customers as they adapt to a changing trade environment," said Carol Tomé, UPS chief executive officer. "Further, the actions we are taking to reconfigure our network and reduce cost across our business could not be timelier. The macro environment may be uncertain, but with our actions, we will emerge as an even stronger, more nimble UPS."

UPS (D1)

The stock is trading below the 30-day SMA. Bulls will attempt to reclaim this level, with the next target at the 50-day SMA near $109.29. Bears, meanwhile, are likely to retest recent lows. The RSI is forming a bullish divergence with higher highs, while the MACD is widening following a bullish crossover.