What UPS’s earnings can tell us about the economy

If Charles Dickens wrote a book about UPS’s day yesterday, it’d be called Missing Expectations. America’s second-largest deliverer of packages reported Q4 earnings that came in below analysts’ revenue expectations.

Why it matters: The carrier’s financial results often serve as a barometer for both the US and global economy, per the WSJ. That’s because UPS delivers packages from retailers to consumers in addition to handling transportation and logistics for manufacturers, providing insight into various B2C (business-to-consumer) and B2B (business-to-business) industries.

So when someone asks “what can brown do for you?” you can answer: “give us some economic insight.” And here it is:

• UPS revenue declined in the last quarter of 2023, due to weaker delivery volumes in both its domestic and international businesses (indicating a slowing economy).
• The company is now projecting 2024 revenue to fall between $92 billion and $94.5 billion, below analysts’ expectations.

UPS is also getting on the job cuts train. The carrier announced plans to trim ~12,000 jobs this year, and also mandated that employees work from offices five days per week starting in March. Per the company, the moves are meant to cut costs and boost productivity amid a slowdown in its business.

📉 The market reacts: UPS shares fell more than 7% in afternoon trading.