UPS revenue reaches 22.9 billion dollars as package yields rise
UPS reported a 6.7 per cent increase in third-quarter revenue, with higher revenue per package in its US and international businesses. Adjustments for transformation costs and goodwill impairment lifted its adjusted earnings above reported profit. The parcel carrier also provided final-quarter and full-year forecasts covering revenue, operating earnings, cash generation and investment spending.
Economics & Markets··Midday
Revenue and adjusted earnings beat estimates
US parcel carrier United Parcel Service, known as UPS, reported third-quarter revenue of 22.9 billion dollars, an increase of 6.7 per cent. Operating profit was approximately 1.7 billion dollars and the operating margin was 7.6 per cent. The company’s adjusted operating profit reached 2.1 billion dollars, with a margin of 9.0 per cent after specified expenses and gains were removed.[1]
Adjusted diluted earnings were 1.69 dollars per share. Zacks reported the same result against its consensus estimate of 1.63 dollars, while noting the year-earlier adjusted result of 1.74 dollars. Reported diluted earnings were 1.37 dollars per share. UPS excluded a net after-tax charge of 279 million dollars, equivalent to 0.32 dollars per share, in arriving at the adjusted outcome.[1], [2]
Package yields rise in domestic and international operations
US Domestic revenue increased 4.5 per cent to 14.865 billion dollars, supported by a 6.1 per cent rise in revenue per package. Its operating margin was 6.1 per cent, or 7.0 per cent after adjustments. International Package revenue grew 7.1 per cent to 5.007 billion dollars. In that business, revenue per package rose 15 per cent and the operating margin reached 14.9 per cent.[1]
Supply Chain Solutions revenue rose 18.2 per cent to 2.981 billion dollars. Operating profit there was 92 million dollars, or 274 million dollars after adjustments. The consolidated adjustments included transformation costs of 130 million dollars and a goodwill impairment of 182 million dollars. A gain of 33 million dollars associated with MD-11 aircraft assets partly offset those after-tax charges.[1]
UPS raises its full-year outlook
Management forecast fourth-quarter revenue of approximately 25.7 billion dollars and adjusted operating profit of 3.3 billion dollars. Its raised full-year outlook called for revenue of 92.6 billion dollars, adjusted operating profit of 8.75 billion dollars and adjusted earnings of 7.28 dollars per share. The company projected free cash flow of 6.1 billion dollars alongside capital spending of 3.0 billion dollars, dividend payments of 5.4 billion dollars and pension contributions of 1.3 billion dollars.[1]
