UPS Cuts Forecast Again After New Labor Deal Shreds Profit

Unfavorable macro-economic conditions hit global demand: CEO
UPS now sees adjusted operating profit margin of 10.8%-11.3%

A UPS delivery truck in San Francisco, California, US, on Tuesday, July 25, 2023. United Parcel Service Inc. reached a tentative agreement to renew a five-year labor contract with the Teamsters ahead of the July 31 deadline, giving relief to stressed shippers and removing a share-price overhang for investors concerned about a costly strike.Photographer: David Paul Morris/Bloomberg

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By Thomas Black

October 26, 2023 at 10:22 AM UTC

Updated on

October 26, 2023 at 1:58 PM UTC

This article is for subscribers only.

United Parcel Service Inc. cut its annual profit target for a second time in less than three months, hurt by a spike in labor costs and lower volumes for shipped packages.

Adjusted earnings came to $1.57 a share, down 47% from a year ago, UPS said Thursday in a statement. Analysts had expected $1.52 after slashing the estimate by about 40 cents due to the impact of a new labor agreement that took effect Aug. 1. Sales dropped about 13% to $21.1 billion.