UPS Reports Strong Earnings but Shares Drop Amid Weak Q3 Outlook
United Parcel Service (UPS) reported better-than-expected earnings for the second quarter with EPS of $1.76 and revenue reaching $22.8 billion, surpassing forecasts. The company also raised its full-year guidance. Despite these positive results, UPS shares fell by 8% due to a weak third-quarter outlook shared during the call. UPS CEO Carol Tomé highlighted that volume growth was achieved when excluding Amazon-related shipments, which have been reduced as part of an ongoing strategy to cut lower-quality volumes and streamline operations. The company has already removed about $4.5 billion in related costs by reducing 2 million pieces a day from its network. Domestic revenue increased by 6%, international rose by 12.5%, and healthcare logistics exceeded $3 billion for the second consecutive quarter. However, investors reacted negatively to the Q3 forecast, which anticipates mid-single-digit declines in domestic volume and flat year-over-year revenue growth due to ongoing impacts from reduced Amazon business.
Topics: Amazon investor sentiment logistics revenue growth UPS