In its fourth-quarter earnings release, UPS reported declines in both domestic and international shipping volume, falling short of Wall Street revenue projections on Tuesday. Additionally, as part of its 2024 resource alignment efforts, the business announced 12,000 layoffs.
CEO Carol Tomé stated during a company earnings call that the employment cutbacks will save the company approximately $1 billion in costs. “2023 was a special, challenging, and, to be really honest, disappointing year.
All three of our business segments as well as volume, revenue, and operating profitability decreased, according to Tomé. In premarket trade, the packaging giant’s shares fell by about 6%. The company’s performance in relation to Wall Street estimates is as follows:
• Adjusted earnings: $2.47 per share compared to the predicted $2.46 per share, as reported by LSEG (formerly Refinitiv).
• Revenue: $24.92 billion compared to the projected $25.43 billion UPS had net income of $1.61 billion, or $1.87 per share, for the final three months of 2023 as opposed to $3.45 billion, or $3.96 per share, for the same period the previous year.
UPS made $2.47 per share after deducting one-time expenses for intangible assets and pensions. From $27 billion to $24.9 billion in revenue last year, there was a 7.8% reduction. The average daily volume decreased 7.4% domestically and 8.3% globally, according to the business.
UPS stated that “softness in Europe” was the main cause of the global decline. Despite the fact that the August labor contract discussions with the Teamsters were not specifically mentioned in the results report, Tomé blamed the negotiations and the overall macroeconomic climate for the “disappointing” year.
UPS projects sales in the range of $92 billion to $94.5 billion in 2024, along with an adjusted operating margin of roughly 10% to 10.6%.