UPS futures drop as Q4 sales and 2024 guidance disappoints

(Sharecast News) - UPS shares were falling sharply ahead of the opening bell on Tuesday after the transport and logistics giant missed forecasts with its fourth-quarter results and underwhelmed with guidance for 2024. The world's largest package delivery firm announced fourth-quarter revenues of $24.9bn, undershooting market forecasts of $25.4bn and down 7.8% on the fourth quarter of 2022, while operating profits sunk 22.5% to $2.5bn.

Adjusted diluted earnings per share, which exclude non-recurring items, fell 31.8% year-on-year to $2.47, slightly above the consensus estimate of $2.46.

Revenues in the larger US division, which accounts for over half of group revenues, were down 7.3% at $16.9bn with average daily volumes. falling by 7.4%. International sales were 6.9% lower at $4.6bn as softness in Europe led to an 8.3% fall in average daily volumes.

Meanwhile, supply chain solutions revenue reduced by 11.4% to $3.4bn due mainly to market rate declines and excess market capacity in forwarding, the company explained.

For the full 2023 year, group sales fell 9.3% to $91bn, while adjusted operating profits sunk 28.7% to $9.9bn and the operating margin came in at 10.9%.

Looking ahead, UPS guided to 2024 revenues of $92bn to $94.5bn, under the $95.57bn that the market is currently pricing in, while the operating margin is expected to fall to between 10.0% and 10.6%.

As of 0645 in New York, UPS futures were trading 6.7% lower at $147.50.