UPS drops 5% as FY sales outlook misses consensus; Company to cut 12,000 jobs

UPS (NYSE: UPS) reported mixed Q4 results today and offered guidance that failed to meet analyst consensus.

At 09:00 EDT (14:00 GMT), UPS stock was down 4.7%.

The company posted an adjusted earnings per share (EPS) of $2.47, in line with the analyst consensus. Revenue for the quarter was $24.92 billion, marking a 7.8% decline y/y, and slightly below the estimated $25.41 billion.

This decline was reflected across different segments: U.S. package revenue fell 7.3% y/y to $16.92 billion, below the consensus of $17.41 billion while international package revenue dropped 6.9% y/y to $4.61 billion, against the expected $4.66 billion.

Finally, Supply Chain Solutions revenue decreased by 11% y/y to $3.40 billion, albeit slightly above the $3.37 billion estimate.

“2023 was a unique and difficult year and through it all we remained focused on controlling what we could control, stayed on strategy and strengthened our foundation for future growth,” said Carol Tomé, UPS chief executive officer.

The average revenue per package showed a marginal increase of 0.5% y/y to $13.11, though it was below the estimated $13.28. Total operating expenses were down 5.9% y/y to $22.44 billion, slightly better than the anticipated $22.64 billion.

Looking ahead, UPS forecasts 2024 full-year revenue to be in the range of $92.0 billion to $94.5 billion, with a consolidated adjusted operating margin between approximately 10.0% and 10.6%. Analysts were looking for $95.6 billion in full-year sales.

Speaking on the call with analysts, the management said it is seeking to cut 12,000 jobs, aimed at securing $1 billion in cost cuts.

"Collectively, results were a bit better while guidance was worse. We’d expect shares to be pressured initially," Citi analyst Christian Wetherbee wrote.

By Senad Karaahmetovic

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