UPS Earnings: Firm Still Expects Solid Second-Half Margin Improvement

UPS' first-quarter top line fell 5% year over year, though volume declines eased in the quarter and revenue was mostly in line with our expectations. Management was up front at its March investor day that first-half package volume and margins would remain pressured but with year-over-year growth returning in the second half. Relative to first-quarter 2023, lower revenue stems from lingering US and international package volume declines and the soft demand and pricing backdrop for truck brokerage (Coyote) and global forwarding. Base rates on package business remained positive, offset by mix and lower fuel surcharges.