UPS Stock Dives as Profits Drop Over 30%

Shares of United Parcel Service (UPS) tumbled 8% successful pre-market trading Tuesday aft nan shipping elephantine reported second-quarter net that were little than analysts expected, amid a pullback from pandemic highs for package deliveries.

Revenue from nan company's shipping operations fell conscionable complete 1% from nan aforesaid clip past twelvemonth to $21.8 billion, while analysts had expected gross to emergence to $22.18 billion, according to estimates compiled by Visible Alpha.

Profits fell by a wider margin, arsenic UPS reported a 32% driblet successful net income to $1.41 billion, down from $2.08 cardinal nan aforesaid clip past twelvemonth and beneath estimates.

UPS Narrows Revenue Outlook, Restarts Buyback Program

UPS narrowed its gross outlook for nan afloat fiscal year, projecting gross of astir $93 billion, compared to a antecedently projected scope of $92 cardinal to $94.5 billion. The institution besides lowered projections for its adjusted operating margin to astir 9.4% for nan year, beneath erstwhile projections of 10% to 10.6%.

CEO Carol Tomé said Tuesday that UPS returned to maturation successful position of shipping measurement for nan first clip successful 9 quarters, suggesting nan normalization from pandemic highs could beryllium astir complete for UPS and shipping rivals for illustration FedEx (FDX). Tomé said nan maturation should let UPS to return to increasing its profits successful nan 2nd half of 2024.

UPS besides announced plans to restart its stock buyback programme pinch $500 cardinal complete nan remainder of 2024, pinch plans to target $1 cardinal annually going forward.

Shares of UPS down 8% astatine $133.54 arsenic of 8:20 a.m. ET Tuesday pursuing nan release.