UPS has reported a 12.8% dip in third quarter revenues year on year, which it said was due to a drop in demand as a result of "unfavorable macro-economic conditions".
The US integrated logistics solutions company said third-quarter 2023 consolidated revenues were $21.1bn.
Consolidated operating profit was $1.3bn, down 56.9% compared to the third quarter of 2022, and down 48.7% on an adjusted basis.
Revenue decreased 11.1% within UPS' International Segment, "primarily driven by a 6.6% decrease in average daily volume and continued softness on Asia and Europe trade lanes", said UPS.
The operating margin for the segment was 14.8%; and the adjusted operating margin was 15.8%.
Last month, Air Cargo News reported that UPS was offering severance packages to hundreds of pilots in response to lower demand levels. This followed a July deal between UPS and the Teamsters union over new pay and working conditions after the express giant had faced potential strike action by workers.
However, the tough economic climate hasn't stopped UPS spending to grow the business. Last month it announced a deal to acquire time-critical logistics firm MNX Global Logistics, and this month it entered into an agreement to acquire US-based software and reverse logistics company Happy Returns from PayPal.
“While unfavorable macro-economic conditions negatively impacted global demand in the quarter, our U.S. labor contract was fully ratified in early September and volume that diverted during our labor negotiations is starting to return to our network. I want to thank all UPSers for their hard work and efforts during this challenging time and for once again providing industry-leading service to our customers,” said Carol Tomé, UPS chief executive. “Looking ahead, we are well-prepared for the peak holiday season.”
"UPS is updating its full-year 2023 consolidated revenue and adjusted operating margin targets primarily to reflect global macro-economic uncertainty," said the company.
"UPS now expects full-year 2023 consolidated revenue to be between $91.3 billion and $92.3 billion and a consolidated adjusted operating margin of between 10.8% and 11.3%."
https://www.aircargonews.net/business/finance/ups-revenues-drop-10-in-second-quarter/
