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UPS fell short of Wall Street revenue estimates Tuesday, reporting drops in shipping volume, both internationally and domestically, in its fourth-quarter earnings report. The company also announced 12,000 layoffs as part of an effort to align resources in 2024.

The workforce reductions will save the company about $1 billion in costs, CEO Carol Tomé said on a company earnings call.

“2023 was a unique, and quite candidly, difficult and disappointing year. We experienced declines in volume, revenue and operating profits and all three of our business segments,” Tomé said.

Shares of the package giant dipped more than 8%.

Here’s how the company performed compared to Wall Street estimates:

  • Adjusted earnings: $2.47 vs. $2.46 per share expected, according to LSEG, formerly known as Refinitiv
  • Revenue: $24.92 billion vs. $25.43 billion expected

For the last three months of 2023, UPS reported net income of $1.61 billion, or $1.87 per share, compared with $3.45 billion, or $3.96 per share, a year earlier. Adjusting for one-time items related to pensions and intangible assets, UPS earned $2.47 per share.

Revenue declined 7.8% to $24.9 billion from $27 billion last year.

The company reported a 7.4% drop in average daily volume domestically and an 8.3% decrease internationally. Tomé said the international softness was “heavily weighted” in Europe, coupled with freight complications in the Red Sea region, as well as the Panama and Suez canals.

Though the earnings report did not directly mention any financial impacts from negotiations with the Teamsters in August over labor contracts, Tomé cited the talks and the macroeconomic environment more broadly as contributing to the “disappointing” year.

The company also said it’s considering selling its Coyote truck brokerage business, which Tomé called a “highly cyclical” business with “considerable earnings volatility.” The CEO also added that the company is planning to ask workers to return to the office five days a week in 2024.

UPS’ 2024 outlook expects revenue to range from $92 billion to $94.5 billion, with an adjusted operating margin of about 10% to 10.6%.

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