2023-04-25 06:39:22 ET
United Parcel Service ( NYSE: UPS ) stock slid sharply on Tuesday after the company narrowly missed Q1 estimates and signaled continued pressure for parcel deliveries ahead.
The Atlanta-based transportation company notched $2.20 in earnings per share, one cent short of analyst expectations. Meanwhile, a 6.1% decline in revenue year over year came in $80M below the Street consensus. The company reported a slight miss in terms of total package volume for the quarter as well, with 1.41B falling short of the 1.42B expectation.
“In the first quarter, deceleration in U.S. retail sales resulted in lower volume than we anticipated, and we faced ongoing demand weakness in Asia,” CEO Carol Tomé explained. “In response, we focused on controlling what we could control and delivered first-quarter consolidated operating profit and operating margin in line with our base case targets. Given current macro conditions, we expect volume to remain under pressure.”
As such, the company updated financial guidance for the full year, tempering expectations.
“Over the first quarter of 2023, the global volume environment deteriorated due to challenging macro conditions and changes in consumer behavior. As a result, UPS expects full-year revenue and adjusted operating margin to be at the low end of its previously guided range,” the earnings release stated.
Management now expects Consolidated revenue of around $97B for the quarter, below the $98.25B consensus, and consolidated adjusted operating margin of around 12.8%. The latter figure is the low end of prior guidance projected to range from 12.8% to 13.6%. Share repurchases targeted to be around $3B for the full-year while capital expenditures are projected to total about $5.3B.
UPS stock tumbled about 5.8% in premarket action on Tuesday.
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UPS stock drives lower as earnings underdeliver, guidance disappoints