- United Parcel Service Inc (NYSE: UPS) shares are falling Tuesday morning following its first quarter 2023 results, which missed the Street view, as deceleration in U.S. retail sales resulted in lower volume than anticipated and ongoing demand weakness in Asia.
- UPS reported Q1 revenues of $22.93 billion, down 6.0% Y/Y, missing the consensus of $23.01 billion.
- Adjusted EPS of $2.20, down 27.9% Y/Y, missed the consensus of $2.21.
- Adjusted operating profit was $2.55 billion, down 22.8% Y/Y.
- U.S. Domestic Segment revenue fell by 0.9% Y/Y to $14.99 billion due to lower average daily volume (-5.4% Y/Y). The adjusted operating margin stood at 9.9%.
- International Segment revenue decreased by 6.8% Y/Y to $4.54 billion, owing to a 6.2% Y/Y decline in average daily volume due to reduced domestic volume and softness in China trade lanes. The adjusted operating margin was 17.7%.
- Supply Chain Solutions Segment revenue decreased by 22.5% to $3.40 billion due to market rate and volume declines in forwarding business, and the adjusted operating margin reached 7.6%.
- FY23 Outlook: UPS expects revenue and adjusted operating margin to be at the low end of its previously guided range at $97.00 billion (consensus $98.13 billion) and 12.8%, respectively.
- UPS reiterated its guidance for capital expenditures at $5.3 billion, dividend payments at $5.4 billion, and share repurchases at $3 billion for FY23.
- "Given current macro conditions, we expect volume to remain under pressure. We will remain focused on driving productivity while investing in efficiency and growth initiatives, enabling us to come out of this demand cycle even stronger," said Carol Tome, CEO.
- Price Action: UPS shares are trading lower by 4.26% at $187.50 premarket on the last check Tuesday.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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