UPS Inc. (NYSE: UPS) on Tuesday lowered its full-year revenue and operating margin projections primarily to reflect the loss of volume and the higher costs associated with the tentative five-year contract reached with the Teamsters union July 25.

Full-year revenue is expected to be $93 billion in 2023, down from the prior forecast of $97 billion, UPS (NYSE: UPS) said in a statement. It now expects an adjusted operating margin this year of 11.8%, compared with an earlier forecast of 12.8%.

In the second quarter, revenue came in at $22.1 billion, compared to $24.4 billion in the year-earlier quarter. Operating profit of $2.8 billion was down 18.4%, on an adjusted basis, from the same period a year ago. Adjusted operating margin was reported at 13.2%. Adjusted diluted earnings per share of $2.54 was slightly above consensus estimates  of $2.50.

UPS said the guidance change was “primarily to reflect the volume impact from labor negotiations and the costs associated with the tentative agreement” that was reached on July 25. The stock fell 5.6% in U.S. trading before exchanges opened.

Second-quarter revenue for the company’s domestic segment, its largest, fell to $14.3 billion from $15.4 billion, while adjusted operating profit dropped to $1.68 billion from $1.85 billion. Average daily volume fell 9.9% year over year, which was partially offset by a 3.3% increase in revenue per-piece.

The international segment posted revenue of $4.4 billion in revenue, down from $5.07 billion, driven by a 6.6% drop in average daily volume. Adjusted operating profit fell to $902 million from $1.2 billion.

UPS’ Supply Chain Solutions unit, which includes all its non-package business, reported a 23.4% drop in revenue to $3.2 billion as rate and volume declines in freight forwarding more than offset growth in its health care logistics business. Adjusted operating profit came in at $336 million, down from $517 million in the 2022 quarter.