United Parcel Service (UPS.N): UPS 2Q: Solid 2Q results show path to better days ahead for UPS, even as investors focus on lingering uncertainties

研报英文原文证据摘录

United Parcel Service (UPS.N): UPS 2Q: Solid 2Q results show path to better days ahead for UPS, even as investors focus on lingering uncertainties

roughly flat y-y” implying $7.16), above our $7.05

prior target.

US Domestic revenue of $14.9 billion was up +6.0% y-y, above Citi/Street’s

$14.5/$14.4 billion estimates and management’s +LSD% guide. US Domestic ADV

growth was down -3.3% y-y (ahead of our -5.5% estimate) but up from 1Q’s -8.0%,

reflecting the glide-down in AMZN volume and deliberate, ongoing actions aimed

at removing lower-yielding volume from the network. The AMZN glide-down

network reconfiguration plan, which began 18 months ago, has now been largely

completed as of the end of 2Q. The glide-down eliminated approximately 2 million

pieces per day of lower-quality AMZN volume and removed roughly $4.5 billion in

related costs. Management expects to deliver approximately $3 billion in savings

from the AMZN glide-down and network reconfiguration in 2026. In the quarter,

SMB volume remained at 34.5% of total US volume, the highest SMB penetration

in UPS’s history. B2B volume reached 43.8% of total US volume, a +10bps y-y

increase. Total operational hours stepped down with volumes in 1H26, as UPS

successfully reduced operational positions by nearly 30,000 vs. 1H25, which

includes reductions from the Driver Choice voluntary retirement buyout program

that was initiated in 1Q26. In fixed cost take-outs, UPS completed 45 closures of

buildings in 1H, with several additional closures planned for 2H26. Domestic

revenue per piece (RPP) was up +9.3% y-y (190bps behind our 11.2% estimate),

with roughly half of the growth attributed to fuel and the other half representing

base pricing and mix. Domestic RPP minus cost per piece (CPP) was $0.82 (below