UPS Expects Fuel Surcharge Rev To Increase In Q2, Primarily Due To Volume Growth And Impact Of Higher Surcharge Modifiers; Sees Q2 Earnings To Be Lower Relative To 2023, Primarily Due To Higher Labor Costs Associated With First Year Of Teamsters Contract; Anticipate A Return To Operating Profit Growth During The Second Half Of 2024
Portfolio Pulse from Benzinga Newsdesk
UPS forecasts an increase in fuel surcharge revenue in Q2 due to volume growth and higher surcharge modifiers. However, Q2 earnings are expected to be lower than the rest of 2023, mainly because of increased labor costs from the first year of the Teamsters contract. UPS anticipates a return to operating profit growth in the second half of 2024.
May 03, 2024 | 10:42 pm
News sentiment analysis
Sort by:
Ascending
NEUTRAL IMPACT
UPS expects higher fuel surcharge revenue in Q2 due to volume growth and surcharge modifiers, but anticipates lower earnings for the quarter due to increased labor costs from the Teamsters contract. Operating profit growth is expected to resume in the second half of 2024.
The increase in fuel surcharge revenue indicates positive volume growth and pricing power, which is a good sign for UPS. However, the expected decrease in Q2 earnings due to higher labor costs could temper investor enthusiasm in the short term. The anticipation of returning to operating profit growth in the second half of 2024 suggests a positive outlook in the medium term, balancing the short-term concerns.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100