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UPS Chief Financial Officer and CEO have indicated that the company anticipates a decline of slightly less than 25% in shipments from China to the U.S., which is UPS's most profitable shipping lane. This expected decrease is projected to create some profit headwinds for the company. However, the decline is expected to be partially offset by notable improvements in shipments from China to the rest of the world and from the rest of the world to the U.S. Despite these mitigating factors, UPS's Q2 operating margin guidance fell short of analyst estimates, resulting in the company’s stock reversing early gains and closing down 1%.
$UPS CEO: "We expect China to the U.S. to decline a little less than 25%...Now what that means is China, the U.S. is our most profitable trade lane. There will be a little bit of profit headwind.
$UPS CFO said they expect China-to-U.S. shipments to drop a little less than 25%, but they’re seeing material improvements in China-to-rest-of-world and rest-of-world-to-U.S. flows that should help offset the decline.
UPS gave up premarket gains of 5% to turn down 1% after its Q2 operating margin guidance missed every analyst’s estimate. And that’s because its most profitable shipping lane is China-to-US. https://t.co/YHNY24T3i8