United Parcel Service Inc. fell the most in seven months after the courier forecast profit margins that fell shy of expectations.
U.S. domestic adjusted operating margins will be between 10.5% and 12% in 2023, the company said Wednesday as it outlined it’s three-year financial plan. Investors had been expecting about 13%, according to analysts who surveyed shareholders before the presentation.
UPS didn’t provide an earnings forecast or offer a cost-cutting plan, which also weighed on the stock.
The shares dropped 5.5% to $198.26 at 11:27 a.m. in New York after tumbling as much as 6.1%, the most intraday since Oct. 28. UPS had gained 25% this year through Tuesday while the S&P 500 rose 13%.
Chief Executive Officer Carol Tome, who assumed her role a year ago, has adopted a “better not bigger” strategy to drive margins higher. The Atlanta-based company is using new technologies to win over small customers that tend to pay full price for delivery while larger clients often command discounts.