UPS shares plummeted on weak quarter and downgraded outlook

United Parcel Service (NYSE:UPS) saw its share price fall in Tuesday’s deals, losing around 13.5%, as its second-quarter financials disappointed investors.

The results showed a decline in revenue and profits, and, a downgrade to full year guidance.

Revenue came in at $21.8 billion, down 1.1% compared to a year ago, whilst net income dropped by 32% to $1.41 billion. On a per share basis, earnings for the quarter was reported at $1.65 down from $2.54 a year ago.

This was short of what Wall Street analysts had predicted, which was $1.99 of earnings on $22.18 billion of revenue.

It blamed weak freight volumes, softer pricing, but attempting to cast a silver lining highlighted that its e-commerce related volumes were picking up helped by two major new customers – and that their impact on volume had been “explosive”.

Shipping volumes in the Business-to-Consumer segment now accounted for some 58.5% of all UPS delivery volumes, it added.

“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,” chief executive Carol  Tomé said in a statement.

“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.”

Nevertheless, UPS downgraded its full-year 2024 revenue guidance to $93 billion, down some $250 million from the prior forecast. Also, operating profit is now expected to be around $8.7 billion, from $9.6 billion.

In New York, UPS shares trade down $19.40 or 13.36% changing hands at $125.78.