During the second quarter, UPS experienced a notable increase in volume in the U.S. for the first time since 2022. However, the company fell short of profit and revenue expectations set by Wall Street analysts, primarily due to a significant charge incurred during the period.
Following this news, UPS shares plummeted by over 7% before the market opened on Tuesday. CEO Carol Tome highlighted that the company achieved volume growth in the U.S. for the first time in nine quarters, marking a pivotal moment for UPS.
The growth in total U.S. domestic package volume was attributed to improvements in ground deliveries. For the three months ending on June 30, UPS reported earnings of $1.41 billion, translating to $1.65 per share. Adjusting for one-time costs, earnings stood at $1.79 per share, falling short of the expected $1.98 per share.
UPS disclosed that the quarter included a charge of $120 million, with $94 million allocated for settling an international regulatory matter and an additional $26 million for transformation and other charges. Operating expenses rose by approximately 3% during the quarter, with compensation and benefits expenses increasing by 2.7%.
In September, the Teamsters approved a tentative contract agreement with UPS, concluding labor negotiations that had the potential to disrupt package deliveries nationwide. The contract included pay raises for both full- and part-time union workers.
Quarterly revenue for UPS amounted to $21.82 billion, falling short of the estimated $22.31 billion. The company revised its full-year revenue outlook to approximately $93 billion, up from the previous range of $92 billion to $94.5 billion. Analysts surveyed by FactSet anticipate revenue of $92.77 billion for the year.
