UPS Q3 2023 Earnings Report
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
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UPS Revenue by Segment
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