UPS Misses Q2 Earnings. Announces Acquisition of Mexican Parcel Carrier Estafeta

Parcel giant UPS misses their Q2 earnings expectations on revenue and profit.

UPS also cut revenue guidance from $94.3 billion to $93 billion.

The numbers came in as follows:

• Earnings per share: $1.79 cents vs. $1.99 expected
• Revenue: $21.8 billion vs. $22.18 billion expected

UPS shares are currently down 13%.

Management cites weak global freight demand and soft pricing as the reason for the miss.

UPS announced the acquisition of Mexican Parcel Carrier Estafeta further expanding its reach as the dominant parcel delivery service in the world.

This acquisition comes just weeks after UPS sold Coyote to RXO for $1.025 billion.

For those who have been following UPS over the years, both of these moves should come as no surprise. Carol Tomé, UPS chief executive officer, has made her vision clear. She wants to focus on what UPS is good at; parcel delivery.

Tomé, said, “Global supply chains are shifting, Mexico's role in global trade is growing, and Mexican SMB and manufacturing sectors are looking for reliable access to the US market. There is no better way to capitalize on these trends than by combining the size and scale of UPS with Estafeta. As the shift to nearshoring continues, our combined business will give customers in Mexico unprecedented access to global markets with seamless service and greater efficiency.”