UPS shares drop on weak 2024 guidance, job cuts
UPS shares were falling sharply on Tuesday after the transport and logistics giant missed forecasts with its fourth-quarter results and underwhelmed with guidance for 2024, as well as announcing the removal of 12,000 jobs.
United Parcel Service Inc.
$134.27
05:45 22/11/24
The world's largest package delivery firm, which employs over 500,000 people worldwide, revealed the job cuts after a disappointing end to 2023, in which revenues fell 7.8% to $24.9bn, undershooting market forecasts of $25.4bn.
Operating profits sunk 22.5% year-on-year to $2.5bn, adjusted diluted earnings per share, which exclude non-recurring items, fell 31.8% year-on-year to $2.47, slightly above the consensus estimate of $2.46.
Revenues in the larger US division, which accounts for over half of group revenues, were down 7.3% at $16.9bn with average daily volumes. falling by 7.4%. International sales were 6.9% lower at $4.6bn as softness in Europe led to an 8.3% fall in average daily volumes.
Meanwhile, supply chain solutions revenue reduced by 11.4% to $3.4bn due mainly to market rate declines and excess market capacity in forwarding, the company explained.
For the full 2023 year, group sales fell 9.3% to $91bn, while adjusted operating profits sunk 28.7% to $9.9bn and the operating margin came in at 10.9%.
Looking ahead, UPS guided to 2024 revenues of $92bn to $94.5bn, under the $95.57bn that the market is currently pricing in, while the operating margin is expected to fall to between 10.0% and 10.6%.
The stock was down nearly 8% shortly after the opening bell on Wall Street at $145.64.