The company also announced that it is targeting approximately $500 million in share repurchases in 2024.
UPS noted that the guidance does not include the impact of the recently announced sale of its trucking business, Coyote Logistics, to RXO Logistics, which UPS said in a previous press release is expected to close by the end of the year.
The company also recently signed an agreement to acquire Mexican courier company Estafeta as it continues to expand its international presence.
Based on an analyst survey by LSEG, here’s how the shipping giant’s performance for the quarter ended June 30 compares with Wall Street expectations:
- Earnings per share: Adjusted: 1.79 cents (expected: 1.99 cents)
- Revenue: $21.8 billion vs. expected $22.18 billion
The company reported quarterly net income of $1.41 billion, or 1.65 cents per share, down from $2.08 billion, or $2.42 per share, in the same period last year. Adjusting for the impact of the resolution of “international regulatory matters,” UPS reported earnings of $1.79 per share.
The company reported operating profit of $1.94 billion, down from $2.78 billion in the same period last year.
“This quarter marked a major turning point for our company as U.S. shipping volumes began to increase for the first time in nine quarters,” UPS CEO Carol Tomé said during the company’s earnings call. “As expected, our operating income for the first half of 2024 was down compared to what we reported last year. Going forward, we expect operating income to return to growth.”
Revenue also fell to $21.82 billion from $22.06 billion a year earlier, mainly due to declines in the domestic and international segments.
Revenue from its U.S. business fell 1.9%, which UPS attributed primarily to a change in product mix. International revenue fell 1%, which UPS attributed to a 2.9% drop in average daily volume.
The company’s third segment, Supply Chain Solutions, saw revenue increase 2.6% compared to the same period last year, mainly due to growth in logistics, including healthcare.
The report comes as weak freight demand and soft prices in the shipping sector have sparked what’s being called a global freight slump, and investors have been looking to UPS’s earnings for insights into whether demand is improving.
UPS recently won the U.S. Postal Service’s air cargo contract from rival FedEx. UPS will become the USPS’s primary air cargo provider on Sept. 30, when its current contract with FedEx expires.
Financial details of the contract had not previously been released, but UPS called the agreement “significant” in an April press release. FedEx said the contract would bring in $1.75 billion in fiscal year 2023.
