Proactive Investors - United Parcel Service Inc (NYSE:UPS) reported mixed first-quarter earnings and a 6% dip in year-after-year revenue which clearly signaled that the large US economy is slowing down.
For the period ending March 31, 2023, the Atlanta-based courier company reported earnings of $2.20 per share on revenue of $22.9 billion. The consensus earnings estimate was $2.19 per share on revenue of $23 billion.
Significantly, operating profit fell 22% on a year-over-year basis for the world’s largest delivery company, sending alarm bells ringing.
The UPS boss was blunt in her comments about the US economy.
“In the first quarter, deceleration in US retail sales resulted in lower volume than we anticipated, and we faced ongoing demand weakness in Asia,” UPS CEO Carol Tomé said in a statement.
“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,” she added.
Investors reacted to the news, sending UPS shares down 4.3% to $187.50 in the premarket session.
Meanwhile, Tomé noted that UPS would remain focused on driving productivity and investing in efficiency and growth initiatives.
UPS said it expects 2023 revenue of $97 billion. The company's previous guidance was revenue of $97 billion to $99.40 billion and the current consensus revenue estimate is $98.26 billion for the year ending December 31, 2023.
The US package delivery organization operates in all three segments; US domestic package, international package and freight management.