UPS boosts volume in US for first time since 2022, but profit and revenue slide
UPS boosted its volume in the U.S. for the first time since 2022 during its second quarter, but profit and revenue fell short of Wall Street expectations, partly due to a hefty charge.
Shares dropped more than 7% before the market opened on Tuesday.
CEO Carol Tome said the package delivery company returned to volume growth in the U.S. during the quarter for the first time in nine quarters.
“This quarter was a significant turning point for our company,” Tome said in a prepared statement.
Total U.S. domestic package volume edged up in the quarter thanks to an improvement in ground deliveries.
For the three months ended June 30, United Parcel Service Inc. earned $1.41 billion, or $1.65 per share.
Stripping out one time costs, earnings were $1.79 per share. This was well below the $1.98 per share that analysts polled by Zacks Investment Research were calling for.
UPS said that the quarter included a charge of $120 million, or 14 cents per share, made up of of a one-time payment of $94 million to settle an international regulatory matter. The period also included transformation and other charges totaling $26 million.
Total operating expenses increased about 3% in the quarter, which included a 2.7% rise in expenses tied to compensation and benefits.
In September the Teamsters voted to approve a tentative contract agreement with UPS, putting a final seal on contentious labor negotiations that threatened to disrupt package deliveries for millions of businesses and households nationwide. The contract included pay raises for full- and part-time union workers.
Quarterly revenue was $21.82 billion, short of Wall Street’s estimate of $22.31 billion.
The Atlanta company now anticipates full-year revenue of about $93 billion. Its previous outlook was for revenue in a range of approximately $92 billion to $94.5 billion.
Analysts surveyed by FactSet expect revenue of $92.77 billion.