United Parcel Service Inc Class B

UPS: XNYS (USA)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	$859.00	Qcjl	Zckvkfdzx

UPS Earnings: Unexpected Customer Mix Shift Hits US Domestic Yields and Margins

Matthew Young

Jul 23, 2024

UPS' second-quarter top line fell 1% year over year, though declines eased sequentially thanks to solid improvement in domestic ground volumes and stabilizing demand trends for the international package division (especially in terms of export activity). On the other hand, revenue came in shy of our anticipated run rate as an unexpected and unfavorable mix shift to lower-priced delivery services hit US Domestic yields (revenue per package). Adjusted domestic operating margin also disappointed given the firm's need to navigate unusually high wage inflation, compounded with the onset of mix-driven yield compression.

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