UPS profit beats estimates, to cut 20,000 jobs on economic worries

United Parcel Service reported first-quarter profit that beat market expectations and said it will cut 20,000 jobs as the parcel giant looks to trim costs in an uncertain economy, sending its shares up more than 5% before the bell on Tuesday.

Extensive tariffs by U.S. President Donald Trump have slowed down trade and led companies to reduce costs in anticipation of a demand hit. For parcel delivery firms, the slowdown is likely to reduce the need for shipping services between companies.

"The actions we are taking to reconfigure our network and reduce cost across our business could not be timelier," CEO Carol Tome said.

UPS said it was not providing any updates to its full-year outlook due to the economic uncertainty even as it lowers costs through jobs cuts, warehouse closures, increased automation and asset sales.

The company last year said it cut its workforce by 12,000 jobs. UPS said on Tuesday it will shut 73 leased and owned buildings by the end of June. The company expects to save $3.5 billion from its initiatives in 2025.

Its first-quarter revenue fell marginally to $21.5 billion but beat Wall Street expectations of $21.05 billion, according to data compiled by LSEG.

Its U.S. domestic segment revenue grew 1.4% to $14.46 billion in the first quarter, driven by increase in air cargo and improving revenue per piece, even as volumes declined.

UPS posted an adjusted profit per share of $1.49 compared with expectations of $1.38.

The world's largest package delivery firm had in January forecast full-year revenue of $89 billion and operating margin of about 10.8%.