UPS shares fall as firm gets more selective on deliveries

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Executives issued growth forecasts largely inline with Wall Street estimates on Wednesday, and said they planned to capture more business from healthcare and small and medium-sized businesses.

Shares in UPS, which have nearly doubled in value over the last year, dropped $12.62 to $197.14 in midday trading.

“Not all packages are attractive to us,” Chief Executive Carol Tome said on the company’s investor day webcast.

Tome said growth from small and medium-sized businesses would outpace those from large customers, including Amazon, its No. 1 client.

Amazon and other large e-commerce companies have muscle to negotiate lower shipping rates than small businesses. Healthcare deliveries, including temperature-monitored shipments from companies like vaccine maker Pfizer Inc (NYSE:PFE), are among the most profitable in the business.

Atlanta-based UPS forecast full-year revenue between $98 billion to $102 billion for 2023, compared with the average analyst estimate of $100.19 billion, according to Refinitiv data. It reported a full-year revenue of $84.6 billion in 2020.

Executives at the company also said it would selectively buy back shares.

UPS now plans to be carbon-neutral across its global operations by 2050.

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