It ‘just doesn’t make sense to us’

Oops (UPS) Notice that it will cut back on deliveries to its largest customer, Amazon (Amzn), sent its stock, tumbling as much as 15% Thursday. But the company says it made the change with the goal of creating profitability in the long term.

UPS CFO Brian Dykes told Yahoo Finance that the strategy is part of a unified shift for the company “to manage our assets and our resources in the areas of the market where we can honestly create higher yields and returns.”

Oops will cut the amount of Amazon supplies it carries by more than 50% in the second half of 2026.

Dykes noticed, while the move leads to lower quantities in the coming quarters, it is also expected to coincide with higher margins.

“The part of the company that we change just doesn’t make sense to us,” Dykes said, adding that Amazon remains a long -term partner, but is likely to be used in deliveries that have multiple pickups or involving moving shipments across the country.

UPS said on Thursday that it expects a turnover of “about $ 89 billion” in 2025, under Wall Street’s consensus forecasts of $ 94.9 billion.

EVERCORE ISI analyst Jonathan Chappell wrote in a note to clients that the quarterly release had “something for everyone … but more for the bears.” Chappell described the pace of the reduction of Amazon -supplies as a “surprise.”

“UPS will customize its network for this Value, but the speed at which it will unfold will have a negative impact on the results in the short term,” Chappell wrote.

For the fourth quarter, which UPS reported Thursday morning, the company’s earnings peaked per year. Share of $ 2.75 Wall Street’s expectations of $ 2.53. And its US domestic operating margin of 10.1% was higher than the expectations of “closer” to 9.5%, per year. Jefferies Equity Analyst Stephanie Moore.

But Moore added that the focus among investors is “square” on the weak sales prospects and the reduced quantities with Amazon.

“The messages today add what has been a frustrating several years for investors,” Moore wrote.

Josh Schapher is a reporter for Yahoo Finance. Follow him on x @_joshschapher.

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