United Parcel (NYSE: UPS) announced Q1 2020 results that missed analyst earnings estimates, additionally the company pulled full year guidance for the fiscal year. UPS stock is down -4.8% vs. a flat market.
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Revenue came in at $18.03 billion, above consensus estimate of $17.2 billion – which had been revised sharply lower by analysts since the onset of the coronavirus pandemic.
UPS Q1 2020 Analyst Revenue Revisions
Adjusted earnings per share of $1.15 was 7% below consensus of $1.23, which were slashed -20% since the beginning of the year. Management stated that the coronavirus had a negative -$140M on net income for the quarter.
Business to Consumer (B2C) volume in the U.S. had spiked to nearly 70% of total volume, offsetting commercial volume declines. Average daily volume across all products was up 8.5% in the U.S.
However operating profit in the U.S. segment was came in at $401M down -42% on a year-over-year basis. The increased volume in the segment couldn’t offset the combination of weaker profitability from the B2C segment and increased self-insurance accruals.
Outlook
Due to the coronavirus pandemic UPS has fully withdrawn it’s previous 2020 revenue and diluted earnings guidance. They have targeted capex reduction of $1 billion for the year and have suspended buybacks.
UPS see’s Asia beginning to stabilize while Europe remains challenged.
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