UPS is set to eliminate 12,000 jobs and has unveiled a revenue outlook for the current year, causing a significant drop in its stock value at the market opening. The company is also considering the potential sale of its Coyote truck load brokerage business.
Following a Teamsters vote in September approving a tentative contract agreement with UPS, the resolution marked the end of contentious labor negotiations that had the potential to disrupt package deliveries nationwide.
During a conference call on Tuesday morning, CEO Carol Tome highlighted that the reduction in UPS’s workforce would result in $1 billion in cost savings. Additionally, the company’s board has approved a 1-cent increase in its quarterly dividend to shareholders, effective February 20.
Tome emphasized aligning the organization with its strategy and focusing resources on essential priorities. She also announced a mandate for employees to return to the office five days a week this year.
Looking ahead, United Parcel Service Inc. projects a 2024 revenue ranging from approximately $92 billion to $94.5 billion, falling short of Wall Street’s expectations, which had anticipated a figure exceeding $95.5 billion. Consequently, UPS shares experienced a nearly 9% decline on Tuesday.
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In the fourth quarter, revenue also missed the mark, decreasing by 7.8% to $24.92 billion, just below Wall Street projections of $25.31 billion. Profits for the quarter ending in December plummeted by more than half to $1.61 billion, or $1.87 per share, compared to $3.45 billion, or $3.96 per share, in the previous year. On an adjusted basis, quarterly earnings per share reached $2.47, slightly exceeding the average estimate, according to FactSet.
