United Parcel Service (UPS) on Tuesday released first-quarter results that surpassed analyst expectations for adjusted profit but fell short of revenue expectations.
UPS reported adjusted earnings per share (EPS)
of $1.43 on adjusted net income of $1.22 billion, above the marks of $1.31 per
share and $1.12 billion analysts
expected, according to estimates compiled by Visible Alpha.1
“Our financial performance in the
first quarter was in line with our expectations, and average daily volume in
the U.S. showed improvement through the quarter," UPS Chief Executive Officer (CEO)
Carol Tomé said in a statement. "Looking ahead, we expect to return to
volume and revenue growth.”
However, UPS's revenue of $21.7
billion came in slightly below analyst estimates of $21.89 billion. Lower
revenue than expected while also reporting a higher profit than estimated could
mean UPS is progressing in its plan to cut billions in costs to deal with drops
in demand after its revenue reached record highs during the pandemic.
One common way of adjusting to the
drop in demand has been to reduce costs, with UPS reporting total operating
expenses down 1.4% in the first quarter compared to the same time last year.
Shipping rival FedEx (FDX)
has also seen revenue decrease in
recent quarters, as demand for things that require package
deliveries like online shopping fell once pandemic restrictions eased.
UPS also affirmed its full-year
guidance, projecting revenue of $92.0 billion to $94.5 billion and an adjusted
operating margin of 10.0% to 10.6%.
In the weeks leading up to
Tuesday's earnings report, UPS made a pair of announcements that could help the
company's stock price down the road, projecting
long-term revenue above expectations, and announcing that it
would replace FedEx as the primary air
cargo provider of the U.S. Postal Service. The change from
FedEx to UPS will happen later this year once the current contract with FedEx
expires in September, but UPS has not given any indications as to how big of an
impact the contract will be on its finances.
UPS shares initially jumped as much as
3% in premarket trading Tuesday after the report was released, but reversed
course and were trading about 1% lower an hour before the opening bell. UPS
closed Monday up 1.8% at $145.36, but the stock is down more than 7% so far
this year and 25% lower in the last 12 months.
Buy, Trade, and Hold 350+ Cryptocurrencies
Join 120 million registered users
exchanging the world's most popular cryptocurrencies. Purchase and trade
Bitcoin, Ethereum, or BNB, Binance's native coin. Whether you're a beginner
trader, crypto enthusiast, or professional, you'll benefit from access to the
global crypto markets while enjoying some of the lowest fees in the business.
Plus, tools and guides that make it easy to safely and securely sell, buy and
convert NFTs on the Binance
https://www.investopedia.com/ups-q1-2024-earnings-8637377