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Earnings
UPS’s Q1 2024 Earnings: $1.41 EPS Beats Expectations, Revenue Miss
UPS reported its first-quarter earnings for 2024, with consolidated revenues of $21.7 billion, a 5.3% decrease from the previous year, but adjusted diluted earnings per share at $1.43.
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UPS (NYSE: UPS) today reported its earnings for the first quarter of 2024, revealing a mix of challenges and resilience amid evolving market conditions.
The company announced consolidated revenues of $21.7 billion, a 5.3% decrease from the $22.9 billion reported in the same quarter last year. Despite the revenue downturn, UPS’s adjusted diluted earnings per share (EPS) stood at $1.43, which, while 35% lower than the previous year’s $2.20, still demonstrates the company’s ability to generate profit in a tough economic landscape.
The quarter also saw a significant reduction in consolidated operating profit, which fell by 36.5% to $1.6 billion compared to the first quarter of 2023.
The performance metrics for the quarter reflect the ongoing adjustments UPS is making in response to both external market pressures and internal strategic shifts.
The company took a total charge of $110 million, or $0.13 per diluted share, related to transformation and other charges, including a non-cash, after-tax impairment charge of $35 million driven by plans to consolidate certain acquired brands within its healthcare portfolio.
CEO Carol Tomé expressed gratitude towards the UPS team for their efforts and highlighted the improvement in average daily volume in the U.S., which suggests a positive trajectory in domestic operations despite the broader revenue decline.
UPS Beats EPS Expectations in Q1 with $1.43, Misses on Revenue
Comparing UPS’s first-quarter performance against market expectations reveals a nuanced picture. Analysts had projected an EPS of $1.31 and revenue of $21.84 billion for the quarter.
UPS’s reported revenue of $21.7 billion slightly missed the mark, while the adjusted EPS of $1.43 surpassed expectations. This discrepancy underscores the company’s ability to manage costs and maintain profitability, even when revenue falls short of forecasts. The detailed performance across different segments—U.S. Domestic Package, International Package, and Supply Chain Solutions—shows varying degrees of revenue decline but also demonstrates UPS’s strategic adjustments to maintain operational margins.
Guidance
Looking ahead, UPS has reaffirmed its full-year 2024 financial guidance, signaling confidence in its strategic direction and operational resilience. The company anticipates consolidated revenue to range from approximately $92.0 billion to $94.5 billion, with an adjusted operating margin expected to be between 10.0% to 10.6%.
Capital expenditures are projected to be around $4.5 billion for the year. This guidance reflects UPS’s commitment to navigating the current economic challenges while investing in future growth opportunities.
Disclaimer: The author does not hold or have a position in any securities discussed in the article.
Tim Fries
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
