UPS Q2 net income drops 32% on lower revenue

Revenue declined marginally (one percent) to $21.8 billion compared to $22 billion in the same period last year. Total operating expenses were up three percent at $19.9 billion.

UPS reported a 0.7 percent year-on-year growth in domestic volume, the first time since the fourth quarter of 2021. Revenue per piece declined 2.6 percent. Revenue declined 1.9 percent to $14.1 billion while operating profit declined 40 percent to $997 million.

International segment revenue declined marginally (one percent) to $4.4 billion, driven by a 2.9 percent decrease in average daily volume. Operating profit was down eight percent at $824 million.

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This quarter was a significant turning point for our company as we returned to volume growth in the U.S., the first time in nine quarters. As expected, our operating profit declined in the first half of 2024 from what we reported last year. Going forward we expect to return to operating profit growth: Carol Tomé, UPS

UPS is getting all ready for starting business with the United States Postal Service (USPS), which it won from FedEx. The network integration is likely to be in place by September 8. "The onboarding has gone well, and we continue to expect this business to be margin accretive for the company," says Tomé. UPS is also very positive on its recent acquisition of Mexico-based parcel company Estafeta.

Together, UPS and Estafeta will be a $1 billion-plus business, Tome says without disclosing the financial details of the acquisition. Estafeta covers 95 percent of the population in Mexico with 145 facilities, and does about 325,000 pieces per day.

While UPS has agreed to sell Coyote to RXO for $1.025 billion, it continues to retain revenue and earnings in its outlook till the deal is finalised.

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