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Sep 30, 2023
UPS Q3 2023 Earnings Report
UPS's Q3 2023 earnings were released, revealing a decrease in consolidated revenues and operating profit compared to the previous year, while the company is well-prepared for the peak holiday season.
Key Takeaways
UPS announced Q3 2023 consolidated revenues of $21.1 billion, a 12.8% decrease from Q3 2022. Diluted earnings per share were $1.31, and adjusted diluted earnings per share were $1.57, 47.5% below the same period in 2022. The company is updating its full-year 2023 consolidated revenue and adjusted operating margin targets.
Consolidated revenues reached $21.1 billion, compared to $24.2 billion last year.
Consolidated operating profit was $1.3 billion, with an adjusted consolidated operating profit of $1.6 billion.
Diluted EPS was $1.31, while adjusted diluted EPS was $1.57, compared to $2.99 last year.
The U.S. labor contract was fully ratified in early September, and volume diverted during labor negotiations is starting to return.
UPS
UPS
UPS Revenue by Segment
Revenue by Segment
U.S. Domestic Revenue
CapyFin.comInternational Revenue
CapyFin.comSupply Chain Solutions Revenue
CapyFin.com Forward Guidance
UPS is updating its full-year 2023 consolidated revenue and adjusted operating margin targets primarily to reflect global macro-economic uncertainty. UPS now expects full-year 2023 consolidated revenue to be between $91.3 billion and $92.3 billion and a consolidated adjusted operating margin of between 10.8% and 11.3%.
Positive Outlook
- Full-year 2023 consolidated revenue expected to be between $91.3 billion and $92.3 billion
- Full-year planned capital expenditures target of about $5.3 billion is maintained.
- Dividend payment expectations of around $5.4 billion are maintained, subject to board approval.
- Full-year 2023 share repurchases are expected to be approximately $2.25 billion.
- The effective tax rate for the full year is expected to be approximately 22%.
Challenges Ahead
- Global macro-economic uncertainty
- Unfavorable macro-economic conditions negatively impacted global demand in the quarter
- Revenue decreased 11.1%, driven by a 11.5% decrease in average daily volume, which was partially offset by a 2.0% increase in revenue per piece in U.S. Domestic segment
- Revenue decreased 11.1%, primarily driven by a 6.6% decrease in average daily volume and continued softness on Asia and Europe trade lanes in International segment
- Revenue decreased 21.4% due primarily to market rate and volume declines in forwarding, partially offset by growth in healthcare in Supply Chain Solutions segment
Revenue & Expenses
Visualization of income flow from segment revenue to net income