synopsis

UPS is aiming to reduce its workforce by approximately 20,000 positions this year and close 73 leased and owned buildings by year-end.

Parcel giant United Parcel Service (UPS) on Tuesday held back from providing updates on its full-year outlook in light of macroeconomic uncertainty, following its first-quarter earnings report that exceeded Wall Street estimates.

The company’s consolidated revenue for the quarter came in at $21.5 billion, marking a 0.7% decrease from the first quarter of 2024, but exceeding an analyst estimate of $21.02 billion, as per FinChat data.

UPS said that a 1.4% rise in U.S. domestic package revenue, driven by increases in air cargo and improvement in revenue per piece, helped offset a deep 15% slide in revenues from its supply chain solutions segment in the quarter.

Consolidated operating profit in the three months through the end of March stood at $1.7 billion, up 3.3% compared to the first quarter of 2024.

The company reported adjusted diluted earnings per share (EPS) of $1.49, exceeding the estimated $ 1.40.

UPS CEO Carol Tomé acknowledged the changing trade environment.

“The actions we are taking to reconfigure our network and reduce cost across our business could not be timelier. The macro environment may be uncertain, but with our actions, we will emerge as an even stronger, more nimble UPS,” she said.

The company stated that it will not provide any updates to its previously issued full-year outlook due to current market uncertainty. In January, UPS forecast full-year revenue of $89 billion and an operating margin of approximately 10.8%.

UPS is aiming to reduce its workforce by approximately 20,000 positions this year and close 73 leased and owned buildings by year-end. The company is also reviewing its network to identify additional buildings for closure, it said.

The parcel giant anticipates $3.5 billion in total cost savings from the measures, along with $400 million to $600 million in expenses related to early asset retirements, lease-related costs, third-party consulting fees, and employee separation benefits.

Were the company to decide to shutter additional buildings, expenses may increase, it warned.

UPS stock is trading nearly 2% higher in pre-market on Tuesday.

The stock is down by about 22% so far this year and by about 35% over the past 12 months.

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