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Yahoo
25 minutes ago
- Yahoo
UPS Withholds Outlook on Market Upheaval After Mixed Quarter
(Bloomberg) -- United Parcel Service Inc. declined to provide earnings guidance as it struggles to get a handle on volatility in the market, underscoring the challenges for the courier's effort to reconfigure its network and revitalize its business. Budapest's Most Historic Site Gets a Controversial Rebuild San Francisco in Talks With Vanderbilt for Downtown Campus Can This Bridge Ease the Troubled US-Canadian Relationship? Trump Administration Sues NYC Over Sanctuary City Policy An Abandoned Art-Deco Landmark in Buffalo Awaits Revival The company said Tuesday that it would not give a revenue or operating profit forecast for the full year 'given the current macro-economic uncertainty.' UPS offered limited predictions around capital expenditures and dividend payments in 2025, and said it still expects $3.5 billion in expense reductions from its ongoing turnaround plan. The hazy outlook suggests a rebound remains out of reach and extends the uncertainty around UPS' business after the company said in April it wouldn't update prior expectations. While many companies suspended guidance early this year due to volatility stemming from President Donald Trump's trade policies, a number of those outlooks have been restored more recently. 'The overall US economy demonstrated continued resilience, but our sector, specifically the US small package market, was unfavorably impacted by US consumer sentiment that was near historic lows,' Chief Executive Officer Carol Tomé said on a conference call to discuss quarterly results. The Atlanta-based courier is struggling to recapture the volume it experienced during the early years of the pandemic, when consumers turned to online shopping while stuck at home. The comedown, exacerbated for UPS by the threat of a union strike that sent some customers to rival firms, has proven stubborn thanks to weak demand across the economy. The company is also grappling with deep-rooted issues such as too much unprofitable volume and high cost structures. Adjusted earnings in the second quarter were $1.55 a share, UPS said in a statement, narrowly missing the $1.56 average of analyst estimates compiled by Bloomberg. Package revenue $14.08 billion was better than expected. UPS shares fell 6.6% as of 9:36 a.m. in New York, the most intraday since April 3. The stock tumbled 19% this year through Monday's close, while the S&P 500 Index gained 8.6%. 'Sentiment was decidedly negative heading into' earnings, wrote JPMorgan analyst Brian Ossenbeck. 'The results and lack of guidance will do little to change that at this point.' To solve some of its woes, UPS has said it's excising more than half of its Amazon business, which represented as much as 11.8% of UPS' total revenue last year. As it pulls away from its largest customer, UPS is focusing on shipments that bring in higher margins than low-value e-commerce parcels. To reorient around smaller volumes, UPS is closing and consolidating facilities and automating them, as well as reducing headcount. Earlier this month the company offered its first-ever voluntary separation agreement to full-time union drivers. The offer includes $1,800 per year of service with a minimum payout of $10,000 for drivers to leave the company. The buyout reflects the unprecedented moment that UPS finds itself in. After more than a century of continual growth, the company is now seeking to slim down its delivery network, and with it, its ranks. While UPS focuses on internal efficiencies, there is less the company can do about trade policies affecting its business. New tariffs, especially the end of the de minimis exemption allowing certain imports into the country duty-free, hit the company's most profitable trade lane, reducing average daily volume between the US and China by 35%, a bigger hit than the company had expected, Chief Financial Officer Brian Dykes said on a conference call with analysts. Another miscalculation adding to UPS' costs in recent months was the decision to break away from a partnership with the US Postal Service in which the company handed off packages to the agency for pricey last-mile deliveries. UPS brought those deliveries in house this year, and found that the cost was higher than expected. Tomé told analysts Tuesday that the company has 'reengaged' with the Postal Service, coinciding with new leadership at the agency. (Updates shares, adds CEO, analyst comments from the fourth paragraph.) Burning Man Is Burning Through Cash It's Not Just Tokyo and Kyoto: Tourists Descend on Rural Japan Everyone Loves to Hate Wind Power. Scotland Found a Way to Make It Pay Off Cage-Free Eggs Are Booming in the US, Despite Cost and Trump's Efforts Elon Musk's Empire Is Creaking Under the Strain of Elon Musk ©2025 Bloomberg L.P. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
29 minutes ago
- Yahoo
Boeing Q2 results beat expectations as plane maker slashes costs
Boeing (BA) reported second quarter earnings on Tuesday that topped expectations and stemmed the tide of cash burn that has plagued the company since early last year as CEO Kelly Ortberg continues his turnaround of the beleaguered jet maker. Boeing reported revenue of $22.7 billion vs. $21.68 billion analysts had forecast, according to Bloomberg data, and a 35% jump compared to a year ago. Last year, the company was mired in a production slowdown stemming from the door plug blowout of an Alaska Airlines 737 Max jet. The company posted an adjusted loss per share of $1.24, less than the $1.40 forecast, while its operating loss came in at $176 million, deeper than the expected $161.1 million. Most importantly, Boeing's cash burn was cut to $200 million during the quarter, a massive improvement from the $2.3 billion cash burn seen last quarter and the $4.3 billion it went through in the same quarter last year. "With the start of the second half of the year, we are moving in the right direction and ahead of where I thought we would be in our recovery," CEO Kelly Ortberg said in a memo to employees. "If we continue to tackle the important work ahead of us and focus on safety, quality, and stability, we can navigate the dynamic global environment and make 2025 our turnaround year." Boeing stock was up over 2% in early trade. Read more: Live coverage of corporate earnings Boeing, once the world's largest plane maker, is in the process of turning its business around following a disastrous 2024, which began with the aforementioned door plug blowout in January. Issues with its supplier Spirit AeroSystems (SPR) and various whistleblower complaints stemming from both production of the 737 Max jet and widebody 787 Dreamliner eventually cost then-CEO Dave Calhoun his job, with Kelly Ortberg named the new CEO in late July and starting on Aug. 8. Ortberg began his turnaround plan deliberately, slowing production of Boeing's jets to hammer out production issues and slowly boosting production in close conjunction with FAA regulators. Earlier this month, Boeing announced that commercial deliveries hit 150 jets vs. 130 delivered in the first quarter and 92 delivered in the year-ago quarter. Of Q2 deliveries, 102 were 737 Max jets (compared to 69 delivered a year ago), 24 were 787s (nine last year), 13 were 777s (seven last year), and nine were 767s (six last year). As for cranking up its 737 Max production, Ortberg said in late May that Boeing's goal was to reach a rate of 42 per month by midyear and to be in a position at the end of the year to review readiness for a rate of 47 per month. Boeing said 737 production hit 38 planes per month in Q2. "Boeing continues to show great progress, but the ramp-up may be more gradual than our prior view," William Blair analyst Louie DiPalma wrote shortly after Ortberg's comments. "Our earlier note indicated that a 47 monthly production rate was possible by the end of 2025. Our new view is that the 47 aircraft per month target is more likely in mid-2026." Boeing faced another crisis in June when an Air India 787 Dreamliner crashed shortly after takeoff from Ahmedabad Airport. Initial reports, however, suggest pilot error may have caused the crash, with the engine fuel control switches moved to the "cut-off" position. Investigators are still trying to determine why that was the case. President Trump's announcement of a trade deal with the EU is seen as a positive for both the autos and aviation sectors, as there was an expectation that the EU would have retaliated with punitive tariffs on aviation products and parts coming from the US. Pras Subramanian is the lead auto reporter for Yahoo Finance. You can follow him on X and on Instagram. Sign in to access your portfolio
Yahoo
an hour ago
- Yahoo
Chinese Crypto Giant Bitmain Plans US Factory in Trump-Era Push
(Bloomberg) -- Bitmain Technologies Ltd., the world's largest manufacturer of crypto mining hardware, plans to open its first US facility in the coming months, a strategic pivot riding the 'Made in America' boom in digital assets. Budapest's Most Historic Site Gets a Controversial Rebuild San Francisco in Talks With Vanderbilt for Downtown Campus Can This Bridge Ease the Troubled US-Canadian Relationship? Trump Administration Sues NYC Over Sanctuary City Policy An Abandoned Art-Deco Landmark in Buffalo Awaits Revival The company intends to officially open a new headquarters and assembly line in either Texas or Florida by the end of the third quarter. Initial output is expected in early 2026, with full-scale production ramping up later in the year, according to Irene Gao, Bitmain's global business chief. The move reflects the renewed wave of American industrial policy favoring domestic production, and operational necessity. As Washington reshapes supply chains around national industrial policies, crypto mining — once a fringe pursuit — is joining the ranks of strategic industries, like semiconductors and energy. Bitmain expects local production to speed up deliveries and repairs for US customers, Gao said. Labor costs are higher, she added, but the move still makes commercial sense — especially in light of uncertainty around tariffs. The US push for Bitcoin supremacy represents 'a unique opportunity,' said Gao, Bitmain's president of mining and chief global business officer, in an interview. Bitmain holds a commanding share of the market for computers used to mine crypto, but US President Donald Trump's trade war has disrupted its American business. Shipments from the Beijing-based company have been held up amid heightened Customs and Border Protection scrutiny, while in January the US Commerce Department blacklisted its artificial-intelligence affiliate, accusing it of 'acting at the behest of Beijing to further the PRC's goals of indigenous advanced chip production.' Further complicating matters is Trump's campaign-trail pledge to concentrate Bitcoin mining activity in the US. Bitmain announced the launch of a US facility about a month after his November 2024 election victory, without divulging its location. Gao said Bitmain intends to hire 250 local employees in the first phase, trained for both manufacturing and site-level maintenance. Bitcoin miners use specialized computers to solve mathematical problems in order to verify blockchain transactions and earn rewards. It's a market Bitmain has dominated since 2013 despite significant changes in the makeup of the energy-intensive industry. Now though with Chinese supply chains under fire and US crypto firms gaining political clout, Bitmain is pushing to secure access to US markets. The US is considered the mining sector's global fulcrum, rising to the fore after a ban in China. Publicly listed American miners — such as Mara Holdings Inc., Riot Platforms Inc. and CleanSpark Inc. — are collectively worth tens of billions of dollars. Trump's sons Eric Trump and Donald Trump Jr. have helped to set up a crypto mining venture named American Bitcoin Corp., in partnership with Hut 8 Corp. and a group of investors. Hut 8 in November 2024 announced the purchase of 31,145 Bitmain machines to upgrade its mining fleet, with delivery expected early 2025. Bitmain's current production capacity includes facilities spread across Southeast Asia — a region vulnerable to stiff trade-protection measures from the Trump administration. What obstacles Bitmain may encounter as it seeks a foothold in the US remain to be seen. Chinese Bitcoin miners operating on US soil drew scrutiny over security concerns during former President Joe Biden's administration. US regulators have not clarified whether crypto hardware will be subject to the same export checks as artificial-intelligence chips. Bitmain has maintained its lead through proprietary technology that enables mass production of powerful mining chips at low cost. While a flurry of US-based companies, including Jack Dorsey's Block Inc. and MARA Holdings-backed Auradine, have entered the mining hardware business, they are yet to match the global scale of China's top manufacturers. --With assistance from David Pan. (Expands tout) Burning Man Is Burning Through Cash It's Not Just Tokyo and Kyoto: Tourists Descend on Rural Japan Everyone Loves to Hate Wind Power. Scotland Found a Way to Make It Pay Off Cage-Free Eggs Are Booming in the US, Despite Cost and Trump's Efforts Elon Musk's Empire Is Creaking Under the Strain of Elon Musk ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
