UPS shares fell over 13% on Tuesday after the shipping giant reported a 32% drop in second-quarter net income to $1.41 billion, missing analysts’ expectations. Revenue from shipping operations dropped 1% to $21.8 billion, below the projected $22.18 billion.
The company narrowed its full-year revenue forecast to around $93 billion, down from $92 billion to $94.5 billion, and lowered its adjusted operating margin projection to 9.4%, below the previous 10%-10.6% range. CEO Carol Tomé noted UPS returned to shipping volume growth for the first time in nine quarters, indicating a near-complete normalization from pandemic highs.
UPS also plans to restart its stock buyback program with $500 million for the rest of 2024 and aims to buy back $1 billion annually thereafter. Customers are increasingly opting for lower-cost services, such as SurePost.