United Parcel Service (UPS) – Get Free Report posted modestly better-than-expected fourth-quarter earnings Tuesday, but weaker overall revenue and a muted outlook sent the package-delivery stalwart’s shares sharply lower in early trading.
Adjusted earnings for the three months ended in December were pegged at $2.47 a share, down 32% from the same period in 2022 but just ahead of the Wall Street consensus forecast of $2.46 a share. Group revenue, the company said, fell 8% to $24.9 billion, just shy of analysts’ estimates of a $25.45 billion tally.
A United Parcel Service truck searches for a house while driving along the coast of Cape Cod on July 24, 2023, in Orleans, Mass. UPS on Jan. 30, 2024, issued a muted sales outlook for the year.
Robert Nickelsberg/Getty Images
Domestic-segment revenue fell 7.3% to $16.92 billion, although revenue per piece, a key industry metric, rose 0.5% to $13.11.
International revenue, meanwhile, were down 7% to $4.61 billion while supply-chain-solutions sales fell 11.4% to $3.4 billion.
For the coming year, UPS sees revenue in the region of $91.3 billion to $92.3 billion, a 3.9% increase from the 2023 total of $90.96 billion.
“I want to thank UPSers for providing the best on-time performance of any carrier for the sixth year in a row,” said Carol Tomé, UPS chief executive. Last year “was a unique and difficult year and through it all we remained focused on controlling what we could control, stayed on strategy and strengthened our foundation for future growth.”
UPS shares were marked 4% lower in premarket trading immediately following the earnings release to indicate an opening bell price of $151.75 each.
UPS ended its labor dispute with the Teamsters in late August after the union voted to to ratify a new five-year $30 billion contract with the world’s biggest package-delivery group.
Under terms of the new agreement part-time workers will earn $21 an hour, a 35.5% increase from prior levels, while certain drivers will earn as much as $49 an hour, with maximum wages of $175,000 a year, by the end of the five-year term.
“This contract will improve the lives of hundreds of thousands of workers,” Teamsters President Sean O’Brien said in a statement. “Teamsters have set a new standard and raised the bar for pay, benefits, and working conditions in the package-delivery industry.”
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