UPS earnings Q2 2024

United Parcel Service on Tuesday reported profit and revenue for the second quarter that came in below expectations and cut its 2024 revenue guidance.

The company’s stock was down more than 13% in midday trading, on pace for its worst day on record.

“Our revenue came in just short of the low end given the current volume momentum we are now experiencing in our business,” UPS Chief Executive Officer Carol Tomé said during the company’s earnings call. “Accordingly, we are adjusting our full-year operating margin guidance to reflect the nature of the volume flowing through our U.S. network.”

UPS now expects 2024 revenue to be approximately $93 billion, revised from a previous forecast for as much as $94.5 billion. Full-year capital expenditures, however, are now expected at around $4 billion, rather than the previous $4.5 billion.

UPS noted that the current 2024 outlook still includes revenue from its trucking business Coyote Logistics, which the company recently announced it’s selling to RXO, Inc. The transaction is expected to close by the end of the year, freeing up cash that the company plans to deploy for share repurchases totaling around $500 million.

The company also recently entered into an agreement to acquire Mexican express delivery company Estafeta, which the company is targeting to close by the end of the year.

Here’s how the shipping giant did in the quarter ended June 30 compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

• Earnings per share: $1.79 cents adjusted vs. $1.99 expected
• Revenue: $21.8 billion vs. $22.18 billion expected

The company’s reported 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 earlier. Adjusting for the impact of settling an “international regulatory matter,” UPS posted earnings of $1.79 per share.

The company reported operating profit of $1.94 billion, down from $2.78 billion a year earlier.

“This quarter was a significant turning point for our company as we returned to volume growth in the U.S., the first time in nine quarters,” Tomé said in the company’s earnings release. “As expected, our operating profit declined in the first half of 2024 from what we reported last year. Going forward we expect to return to operating profit growth.”

Revenue also fell to $21.82 billion,…