Shares of United Parcel Service Inc. dove toward a more than three-year low Thursday, after the package delivery giant extended its quarterly streak of revenue misses and cut its full-year outlook due to concerns over economic growth.
“While unfavorable macroeconomic conditions negatively impacted global demand in the quarter, our U.S. labor contract was fully ratified in early September and volume that diverted during our labor negotiations is starting to return to our network,” said Chief Executive Carol Tomé. “Looking ahead, we are well-prepared for the peak holiday season,” she added.
The stock UPS,
Net income fell to $1.13 billion, or $1.31 a share, from $2.58 billion, or $2.96 a share, in the same period a year ago. Excluding nonrecurring items, adjusted earnings per share of $1.57 beat the FactSet consensus of $1.52.
Revenue fell 12.8% to $21.1 billion, below the FactSet consensus of $21.40 billion, to mark the fifth-straight quarterly revenue miss.
Domestic package revenue declined 11.1% to $13.66 billion, to miss expectations of $13.74 billion. Average daily volume fell 11.5%, while revenue per piece increased 2.0%.
International package revenue was down 11.1% to $4.27 billion, just below the FactSet consensus of $4.29 billion, and supply-chain and freight revenue fell 21.4% to $3.13 billion, below expectations of $3.37 billion.
For 2023, the company cut its revenue outlook to between $91.3 billion and $92.3 billion from about $93 billion, “primarily to reflect global macroeconomic uncertainty.” The current FactSet consensus is $92.87 billion.
UPS affirmed its full-year dividend payment expectations of around $5.4 billion, but cut its expectation for share repurchases to “approximately” $2.25 billion from “around” $3 billion.