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UPS misses on Q4 earnings

Yahoo Finance Live anchors discuss quarterly earnings for UPS.

Video Transcript

- All right, number three here, UPS missed the Street's revenue forecast in the fourth quarter as cooling demand weighed on deliveries, declining nearly 3% from last year. The shipping and transportation giant also offered a downbeat outlook for the year as cost savings and volume declines take hold. Cautious outlook from UPS here, of course, but again, really not as bad as what we've been hearing from FedEx the past couple quarters.

- Yeah.

- Well, maybe not as bad, and also, if you look under the hood here at some of the other numbers that we're watching here, the company did announce that $5 billion buyback. So, maybe it's throwing a bone to shareholders, but it's a bone that maybe they're taking, right? The company is also, with that CapEx increase to about $5.3 billion, is-- or at least-- I don't actually know if it's an increase, but it's a little bit ahead of what analysts were projecting-- is trying to make sure that it's continuing to invest here in making sure that things run on time, that it's not-- that its deliveries are running as they're supposed to even as demand is falling for absolute volume. So, maybe that's something that investors are looking to this morning.

- You know, I think one of the lessons learned, perhaps, for this quarter from UPS is the fact that you did have a era where they were increasing prices, where consumers, whether it's their business consumers or their end consumer at the end of the day, is bucking back at some of those prices. And perhaps you saw some of the volumes directly correlate with that. And so in a lower demand type of equation or at least a lower volume equation now, that impacting UPS, at least in this most recent quarter. And perhaps that was one of the leverage mechanisms for individual households and businesses was to say, all right. If we're already going to be hit by higher prices, where do we start to cut off some of the other expenses that we're going to take on, especially during a busy holiday shopping season and shipping season as well?

- Yeah, I don't think this report solid. It would have been worse if it wasn't run by CEO Carol Tomé. I'll tell you that much right now.

She's really focused on cutting expenses. That was one of the first things or first measures she did when she got into the company. But I don't think it sends any positive signals for how the retailers did this holiday season.

No. No, I don't think it does. And for retailers, many of them were passing along those shipping costs to their customers anyway. If I order through one of the apps that I have a membership on, they're going to say, OK, yeah, we're going to essentially make sure that we're going to waive some of those costs for you. But that cost can be factored in elsewhere into your experience within that product purchase as well.

- Really factor into our wallet.