Atlanta, Georgia – The global shipping company UPS recently announced their plans to target around $500 million in share repurchases by 2024. The company’s guidance did not include the impact of the recent sale of its trucking business Coyote Logistics to RXO Logistics, which is expected to be completed by the end of the year.
In addition to the sale, UPS also entered into an agreement to acquire Mexican express delivery company Estafeta, signaling its commitment to expanding its international presence. The company’s strategic moves reflect its efforts to strengthen its position in a competitive market.
Despite facing challenges such as weak freight demand and soft pricing in the shipping sector, UPS reported a net income of $1.41 billion for the quarter, with adjusted earnings per share of $1.79. This marked a decline from the previous year, attributed to various factors including changes in product mix and volume.
UPS CEO Carol Tomé expressed optimism about the company’s performance, noting that they had returned to volume growth in the U.S. for the first time in nine quarters. While operating profit dipped in the first half of 2024 compared to the previous year, Tomé emphasized expectations for future growth.
The company’s revenue for the quarter fell to $21.82 billion, down from $22.06 billion a year earlier. Revenue declines in both domestic and international segments were partially offset by growth in the supply chain solutions segment, driven by logistics, including healthcare.
UPS’s recent contract win as the primary air cargo provider for the United States Postal Service, replacing rival FedEx, highlighted the company’s continued focus on expanding its portfolio of services. The deal, though undisclosed in financial terms, was deemed significant by UPS, underscoring the company’s competitive position in the market.
Overall, UPS’s strategic moves, financial performance, and outlook indicate a proactive approach to navigating challenges in the shipping industry and capitalizing on opportunities for growth and expansion. Investors and industry analysts will be closely watching UPS’s future earnings reports to gauge the company’s progress and performance in a dynamic market environment.
