Shares of United Parcel Service Inc. (UPS) sank 5.2% towards a two-month low in premarket trading Tuesday, following a disappointing fourth-quarter report. The package delivery giant reported lower-than-expected earnings and provided a downbeat outlook for 2024. This comes as both the U.S. domestic and international businesses face weakness.
Q4 Performance and Outlook
Net income for the fourth quarter dropped to $1.61 billion, or $1.87 per share, compared to $3.45 billion, or $3.96 per share, in the same period the previous year. Adjusted earnings per share, excluding nonrecurring items, came in at $2.47, surpassing the FactSet consensus by one cent.
However, revenue fell 7.8% to $24.92 billion, missing the FactSet consensus of $25.40 billion. This marks the sixth consecutive quarter that revenue has fallen short of forecasts.
Challenging Business Segments
Among UPS' business segments, U.S. domestic package revenue declined by 7.3% to $16.92 billion, below the FactSet consensus of $17.39 billion. International revenue also saw a decline of 6.9% to $4.61 billion, missing expectations of $4.64 billion.
Disappointing 2024 Outlook
Looking ahead, UPS expects revenue for 2024 to range from $92.0 billion to $94.5 billion. This forecast is below the current FactSet consensus of $95.51 billion.
Stock Performance
Despite this disappointing news, UPS stock has gained 13.9% over the past three months through Monday. In comparison, the Dow Jones Transportation Average (DJT) has seen a 15.3% rally, while the Dow Jones Industrial Average (DJIA) has advanced 16.4%.
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