United Parcel Service Inc (UPS)

United Parcel Service (UPS) stock plummeted by 8.16% due to its annual investor day. Despite announcing ambitious 2026 targets, including revenue projections of $108 billion to $114 billion and an adjusted operating margin target of 13%, UPS's stock took a hit as investors expressed concerns about the near-term outlook.

• Near-Term Challenges: Investors were particularly focused on UPS's near-term challenges, which include a gloomy environment for shippers. Large customers have been scaling back inventories due to economic uncertainties and consumer health concerns, leading UPS to warn that the current quarter will be the "toughest" of 2024. The company expects profits to decline by 40% year over year in this period and has initiated aggressive cost-cutting measures in response.
• Long-Term Outlook: Despite the short-term challenges, UPS remains optimistic about its long-term prospects. CEO Carol Tomé highlighted the company's plans to create a growth flywheel in premium markets while driving higher productivity and efficiency over the next three years. Tomé expressed confidence that the small package industry is poised to return to growth in 2024 and beyond, following a difficult market in 2023.
• Investor Sentiment: The sharp decline in UPS's stock price reflects investor sentiment regarding the company's ability to navigate the current challenges and achieve its long-term goals. UPS's strategies to address the near-term difficulties and drive long-term growth will be closely watched by investors in the coming quarters.

United Parcel Service, Inc. (UPS) stock fell down by 8.20% due to disappointing fourth-quarter revenue results and an announcement of 12,000 job cuts. The company's weaker-than-expected sales performance in Q4 2023 and a subdued FY24 sales forecast rattled investor confidence.

• Revenue Falls Short: UPS reported a 7.8% yoy drop in Q4 2023 revenue, amounting to $24.92 billion, falling short of the expected $25.43 billion. Adjusted earnings per share (EPS) stood at $2.47, a decrease from $3.62 in the fourth quarter of 2022, in line with consensus estimates.
• Job Cuts Announced: The company struggled with reduced shipping volumes both domestically and internationally, prompting the decision to reduce its workforce by 12,000 employees in 2024, a move expected to yield approximately $1 billion in cost savings. CEO Carol Tomé acknowledged the challenges faced in 2023, including declines in volume, revenue, and operating profits across all business segments.

Shares of United Parcel Service (UPS) dropped by 5.93% from $146.93 to $138.21 in the trading on Thursday, October 26, 2023. The reason why UPS stock down is due to UPS's mixed third-quarter results, which included beating earnings expectations but falling short on revenue.

• While UPS reported earnings of $1.57 per share (adjusted for one-time items), surpassing the expected $1.52 per share, it disappointed with $21.1 billion in revenue, missing the anticipated $21.4 billion.
• The company also faced a 13% year-over-year decline in sales, leading to a significant drop in profits due to high fixed costs. Adjusted earnings in Q3 were only about half of the previous year's, with GAAP earnings even weaker at $1.31 per share, down 56% from Q3 2022.
• UPS attributed these challenges to "unfavorable macro-economic conditions" affecting global demand.
• Looking ahead, UPS lowered its full-year revenue projection to $91.3 billion to $92.3 billion, indicating a potential second earnings miss in Q4 and an 8.5% drop in sales compared to 2022.