Shares of United Parcel Service (UPS) fell in early trading after reporting mixed second quarter results. The shipper's second quarter adjusted earnings of $2.54 per share topped Wall Street estimates, but revenue of $22.1 billion fell short of the $23.0 billion analysts were expecting. The company also cut its full-year revenue and profit margin forecast. UPS is feeling the impact of the slowdown in China. It's also coping with the impact of its negotiations and deal with the Teamsters union. Yahoo Finance Live breaks down the company's results.

Video Transcript

- The package delivery giant missed Wall Street's revenue estimates with about $22 billion but had better than expected adjusted profit at $2.54 a share. Really though, in terms of our takeaways, Brad Smith, we are focusing on a couple of different things here. So why don't you kick it off?

BRAD SMITH: Yeah. One of them was international revenue. And we called this out this morning after the earnings dropped here, potentially a larger headwind that could continue to persist right now from China. If you look through the earnings results from UPS, one of the things that they did talk about was that softness in the Asia market there.

So that's one of the hits on this most recent quarter and could potentially proceed into the next quarter as well when you consider about some of that weakness and how that shows up in their forecast. You were also keeping an eye on volumes. And before we get to that, the Teamster negotiation, which essentially concluded. I mean, it's still--

- Basically, they have to ratify.

BRAD SMITH: Right. It has to be ratified.

- But it's largely been agreed to. It's just a matter of now putting that final stamp of approval on that agreement. But it's not just the cost directly related to that. It's the fact that some of the clients of UPS put off their orders while they were waiting for these negotiations to conclude. So in terms of that, that obviously is one of the things that is feeding into this lowered guidance that we talked about.

I'm also looking here in the US. The company said that domestic revenue was down by nearly 7%. That was because of a 10% drop in average daily volume. At the same time, there was a 3.3% increase in revenue per piece. So even though we have seen the sort of broader conversation among companies, whether it's shippers like this, or it's packaged consumer good companies, et cetera, we've seen the volume versus price narrative kind of cool off a little bit because we are seeing some disinflation here, but we're still sort of having that conversation when it comes to UPS. So it's kind made up to some degree for that drop in volume with an increase in prices but not all the way.