UPS (New York Stock Exchange: UPS) stocks fell as much as 5% premarket Thursday after the company lowered its full-year 2023 outlook citing global macroeconomic uncertainty.
The Atlanta-based transportation and logistics company now expects full-year 2023 consolidated revenue of $91.3 billion to $92.3 billion (up from ~$93 billion previously and $92.74 billion in consensus).) and a consolidated adjusted operating margin of 10.8%-11.3% (versus 11.8% previously).
However, the company left unchanged its full-year planned capital expenditure target of ~$5.3 billion and its dividend payout expectations of ~$5.4 billion, subject to board approval. .
Unfavorable macroeconomic conditions also negatively affected global demand, which, in turn, hurt the company’s third quarter results. Third-quarter consolidated revenue fell 12.8% year over year to $21.1 billion, while adjusted diluted earnings per share of $1.57 were 47.5% lower than the same period in 2022.
The US domestic segment saw its revenue decline 11.1%, driven by an 11.5% drop in average daily volume, which was partially offset by a 2.0% increase in piece revenue .
Revenue in the international segment fell 11.1%, driven primarily by a 6.6% decline in average daily volume and continued weakness in Asia and Europe trade lanes.
CEO Carol Tomé said: “While unfavorable macroeconomic conditions negatively affected global demand in the quarter, our US labor contract was fully ratified in early September and the volume diverted during our labor negotiations is starting to return to our network. Looking ahead, we are well prepared for the peak holiday season.”
