UPS Stock Gains After Beating Q1 Estimates, Plans $2B Share Buyback In FY22

  • United Parcel Service, Inc.UPS reported first-quarter FY22 revenue growth of 6.4% year-over-year to $24.4 billion, beating the consensus of $23.79 billion.
  • U.S. Domestic Segment revenue increased by 8% Y/Y to $15.12 billion, driven by a 9.5% increase in revenue per piece. The adjusted operating margin was 11.3%, up by 83 bps.
  • International Segment revenue increased by 5.8% Y/Y to $4.88 billion, driven by a 10.5% increase in revenue per piece. The adjusted operating margin was 23%, down by 70 bps.
  • Supply Chain Solutions Segment revenue increased by 2% Y/Y to $4.38 billion, led by Forwarding, which grew 25%, and adjusted operating margin expanded by 180 bps to 11%.
  • Adjusted EPS improved by 10.1% Y/Y to $3.05, beating the consensus of $2.88.
  • Consolidated operating profit increased by 17.6% Y/Y to $3.3 billion and was up 12.1% adjusted.
  • UPS generated cash from operating activities for Q1 of $4.48 billion and Free cash flow of $3.91 billion. Adjusted return on invested capital was 31.4%.
  • FY22 Outlook reaffirmed: UPS expects consolidated revenue of about $102 billion vs. a consensus of $102.09 billion. It sees an adjusted operating margin of ~13.7% and an adjusted return on invested capital above 30%.
  • Capital expenditures are expected to be 5.4% of revenue or ~$5.5 billion, and dividend payments to be around $5.2 billion.
  • UPS plans to double the amount of share repurchases for 2022, taking the target to $2 billion for the year.
  • Price Action: UPS shares are trading higher by 1.77% at $192.72 during the premarket session on Tuesday.
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UPSUnited Parcel Service Inc
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