UPDATE 1-UPS profit falls on high labor costs, weak small-package demand

Reuters04-23

(Updates with details from release, background throughout)

April 23 (Reuters) - United Parcel Service reported a decline in first-quarter profit on Tuesday, as margins came under pressure from subdued demand for small-package delivery and higher costs tied to a new labor contract with the Teamsters union.

Delivery companies such as UPS and FedEx have seen demand normalize following a boom during the pandemic, when home-bound consumers were forced to shop online.

UPS reported a 3.2% decline in average daily volumes in its domestic segment and a 5.8% drop in its international segment.

A new labor contract with the Teamsters union is also squeezing the Atlanta-based company's profit.

UPS is absorbing 46% of the wage and benefit costs of the new five-year contract in 2024, and has said it does not expect business conditions to improve until the second half of the year.

The company reported an adjusted operating margin of 8%. In January, UPS said it expects its first-quarter profit margin to be the lowest in 2024.

The world's biggest package delivery firm by market capitalization posted an adjusted profit of $1.43 per share for the quarter, compared with $2.20 per share a year ago.

(Reporting by Ananta Agarwal in Bengaluru and Lisa Baertlein in Los Angeles; Editing by Devika Syamnath)

((Ananta.agarwal@thomsonreuters.com;))

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In January, UPS said it expects its first-quarter profit margin to be the lowest in 2024. </p><p>   The world's biggest package delivery firm by market capitalization posted an adjusted profit of $1.43 per share for the quarter, compared with $2.20 per share a year ago.</p><p> (Reporting by Ananta Agarwal in Bengaluru and Lisa Baertlein in Los Angeles; Editing by Devika Syamnath)</p><p>((Ananta.agarwal@thomsonreuters.com;))</p></body></html>","source":null,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>UPDATE 1-UPS profit falls on high labor costs, weak small-package demand</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nUPDATE 1-UPS profit falls on high labor costs, weak small-package demand\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-04-23 18:09 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://api.rkd.refinitiv.com/api/News/News.svc/REST/News_1/RetrieveStoryML_1><strong>Reuters</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>(Updates with details from release, background throughout)      April 23 (Reuters) - 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United Parcel Service    reported a decline in first-quarter profit on Tuesday, as margins came under pressure from subdued demand for small-package delivery and higher costs tied to a new labor contract with the Teamsters union.   Delivery companies such as UPS and FedEx    have seen demand normalize following a boom during the pandemic, when home-bound consumers were forced to shop online.   UPS reported a 3.2% decline in average daily volumes in its domestic segment and a 5.8% drop in its international segment.    A new labor contract with the Teamsters union is also squeezing the Atlanta-based company's profit.    UPS is absorbing 46% of the wage and benefit costs of the new five-year contract in 2024, and has said it does not expect business conditions to improve until the second half of the year.    The company reported an adjusted operating margin of 8%. In January, UPS said it expects its first-quarter profit margin to be the lowest in 2024.    The world's biggest package delivery firm by market capitalization posted an adjusted profit of $1.43 per share for the quarter, compared with $2.20 per share a year ago. 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