The company also announced that it aims to buy back about $500 million in shares by 2024.
UPS noted that the guidance does not include impacts from the recently announced sale of its trucking business, Coyote Logistics, to RXO Logistics. The transaction is expected to close by the end of the year, UPS said in an earlier press release.
The company recently signed a deal to acquire Mexican express delivery company Estafeta as it continues to expand its international presence.
Here’s how the shipping giant did it For the quarter ended 30th June Compared to what Wall Street expected, based on LSEG’s survey of analysts:
- Stock Gains: $1.79 cents adjusted and $1.99 expected
- Revenue: $21.8 billion and $22.18 billion expected
The company’s net income for the quarter was $1.41 billion, or $1.65 cents per share, compared with $2.08 billion, or $2.42 per share, a year ago. Adjusted for the impact of settling an “international regulatory matter,” UBS reported earnings of $1.79 per share.
The company posted an operating profit of $1.94 billion, down from $2.78 billion a year earlier.
“This quarter marked a significant turning point for our company as we returned to volume growth in the U.S. for the first time in nine quarters,” UPS CEO Carol Dohm said in the company’s earnings release. “As expected, our operating profit for the first half of 2024 was down from what we reported last year. Going forward, we expect to return to operating profit growth.”
Revenue also fell to $21.82 billion, down from $22.06 billion a year earlier, mainly due to declines in the company’s domestic and international divisions.
Its U.S. operation saw a 1.9% drop in revenue, which the company said was primarily due to changes in product mix. UPS said revenue in the international segment fell 1%, a 2.9% drop in average daily volume.
The company’s third division, Supply Chain Solutions, grew its revenue by 2.6% year-over-year, primarily due to growth in logistics, including healthcare.
The report comes amid what some are calling a global freight slowdown due to weak cargo demand and soft pricing in the shipping industry. Investors turned to UPS earnings to gauge whether demand is improving.
UPS recently wrested an air cargo contract with the United States Postal Service from rival FedEx. UPS will become USPS’ primary air freight provider starting September 30 after FedEx’s current contract expires.
Although financial details of the deal were not previously disclosed, UPS described the award as “significant” in an April press release. The deal is worth $1.75 billion for FedEx in fiscal 2023, the company said.
