UPS reports shipping volume declines in Q1 profit beat

United Parcel Service (UPS) is reporting declines in its delivery volumes in its first-quarter earnings figures. While results were mixed on the postal carrier's top and bottom lines, UPS saw profits beat estimates.

Morning Brief Anchors Seana Smith and Brad Smith dive into UPS's earnings while taking into account its cost-cutting strategies to offset rising labor costs.

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This post was written by Luke Carberry Mogan.

Video transcript

SEANA SMITH: Let's get to another big earnings that's in focus here this morning, and that is UPS. Reporting mixed results for the first quarter, but the shipping giant beat on profit after implementing a $1 billion cost-cutting plan back in January. That was done to offset the slump in demand that's clearly reflected in the volume numbers, so volumes falling 3.2% in the US, 5.8% on an international basis.

So clearly, we are seeing some of that drag on UPS that we had seen over the last couple of quarters. The fact that we have this falling volume here clearly a challenge for UPS. Some of the cost-cutting measures that we were just highlighting there trying to offset some of those challenges, but really we look at UPS almost as an economic bellwether here.

Exactly what people are spending, how much they're spending, how much they're ordering. Not exactly a massive surprise that we're coming off those pandemic era inflated volume numbers here, but clearly that steady decline is a bit worrisome here for the street.

BRAD SMITH: Yeah. And looking through to the kind of full year here and the company looking out to the rest of the year Carol Tomé, the CEO of UPS expecting that average daily volume in the US will show more improvement through the quarter and looking ahead to return to volume and revenue growth later on this year.

But again, I mean, this coming off of a critical season in Q1 where monitoring the consumer, monitoring where some of these spend moderation is actually shifting or slipping lower and how that directly impacts UPS at a time where we're coming off of a year where there were major labor negotiations that took place, and that has to be factored in to the profitability metric here that a lot of analysts are perhaps going to ask a little bit more about on the call as well here.