United Parcel Service, Inc. (NYSE:UPS) stock fell 1.93% (As on July 24, 11:23:48 AM UTC-4, Source: Google Finance) after the company reported profit and revenue for the second quarter that came in below expectations and cut its 2024 revenue guidance. The company’s reported net income for the quarter was $1.41 billion, or $1.65 cents per share, compared with $2.08 billion, or $2.42 per share, a year earlier. The company reported operating profit of $1.94 billion, down from $2.78 billion a year earlier. It was able to raise its US package delivery volume for the first time in more than two years, but the packages its shipping are smaller and less profitable. Meanwhile, the company is dealing with an expensive new union contract negotiated by the Teamsters last year.

UPS in the second quarter of FY 24 has reported the adjusted earnings per share of $1.79, missing the analysts’ estimates for the adjusted earnings per share of $1.99, based on a survey of analysts by LSEG. The company had reported the adjusted revenue growth of 35.9 percent to $21.8 billion in the second quarter of FY 24, missing the analysts’ estimates for revenue of $22.18 billion. Its U.S. operation saw a 1.9% decrease in revenue, which the company said was due primarily to changes in product mix. UPS’s international segment saw a 1% decline in revenue during the second quarter, which UPS attributes to a 2.9% decrease in average daily volume. The company’s third segment, supply chain solutions, increased its revenue by 2.6% from same time last year, due primarily to growth in logistics, including health care.

UPS now expects 2024 revenue to be approximately $93 billion, revised from a previous forecast for as much as $94.5 billion. Full-year capital expenditures, however, are now expected at around $4 billion, rather than the previous $4.5 billion. UPS noted that the current 2024 outlook still includes revenue from its trucking business Coyote Logistics, which the company recently announced it’s selling to RXO, Inc. The transaction is expected to close by the end of the year, freeing up cash that the company plans to deploy for share repurchases totaling around $500 million. The company has also recently entered into an agreement to acquire Mexican express delivery company Estafeta, which the company is targeting to close by the end of the year.