Shares of United Parcel Service plunged more than 17% Thursday after the company issued weak revenue guidance for the year and said it planned to cut deliveries for Amazon, its largest customer, by more than half.
The shipping giant said in its fourth-quarter earnings report that it "reached an agreement in principle with its largest customer to lower its volume by more than 50% by the second half of 2026."
At the same time, UPS said it's reconfiguring its U.S. network and launching multi-year efficiency initiatives that it expects will result in savings of approximately $1 billion.
UPS CEO Carol Tome said on a call with investors that Amazon is UPS' largest customer, but it's not the company's most profitable customer. "Its margin is very dilutive to the U.S. domestic business," she added.