UPS reported that its revenue and profit continued to decline in the first quarter, but its CEO sees a recovery to growth in the future.

The shipping giant reported $1.1 billion in net income for the first three months of the year, down 41% from $1.9 billion in the same period of 2023.

It had $21.7 billion in first quarter revenue, down 5.3% from $22.9 billion in the year-ago quarter.

But UPS CEO Carol Tomé said the performance was “in line with our expectations.”

“Looking ahead, we expect to return to volume and revenue growth,” she said in a written statement.

Average daily volume decreased 3.2% in the company’s U.S. domestic segment. But that’s a smaller decline than the 7.4% decrease in the fourth quarter of the year. Tomé said during an investor conference call Tuesday that the rate of decline slowed in the first three months of the year as UPS won new business.

Looking ahead, the company reaffirmed its target for full-year results, aiming for $92 billion to $94.5 billion in revenue.

“We saw pockets of export growth in certain markets,” Tomé said. But the company also saw continued soft demand with companies shifting to cheaper, slower ground shipping.

At the same time, UPS has had an increase in costs with a new labor contract struck last year with the International Brotherhood of Teamsters, which averted a strike. The company’s union wage rates increased 13% in the first quarter.

“We still expect first half earnings to decline and second half earnings to grow, as we lap the first year of the Teamsters contract,” Tomé said.

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