UPS Delivers Mixed Bag Of Q1 Results, Maintains Guidance Despite Lower Volumes

United Parcel Service Inc UPS shares are trading slightly higher after it reported first-quarter FY24 results.

Revenue declined 5.3% Y/Y to $21.7 billion, missing the consensus of $21.9 billion. 

Adjusted EPS was $1.43, down from $2.20 in the prior-year quarter, beating the consensus of $1.30.

Consolidated operating profit was $1.6 billion, down 36.5% Y/Y and down 31.5% on an adjusted basis.

U.S. Domestic Segment revenue fell 5.0% Y/Y to $14.2 billion due to a 3.2% decrease in average daily volume. The adjusted operating margin stood at 5.9%.

International Segment revenue decreased by 6.3% Y/Y to $4.26 billion, owing to a 5.8% decrease in average daily volume. The adjusted operating margin was 16.0%.

Supply Chain Solutions Segment revenue decreased by 5.3% to $3.2 billion due to market rate declines in forwarding, and the adjusted operating margin was 7.0%.

UPS’ operating cash flow for the quarter totaled $3.3 billion, and free cash flow was $2.3 billion.

2024 Outlook Reaffirmed: UPS expects revenue of $92 billion-$94.5 billion versus the $93.03 billion consensus and sees an adjusted operating margin of 10%-10.6%.

UPS expects 2024 capital expenditures of about $4.5 billion.

Last month, UPS said it expects FY26 consolidated revenue of $108 billion – $114 billion, adjusted operating margin above 13%, and free cash flow of $17 billion – $18 billion.

This month, UPS disclosed winning a significant air cargo contract from the United States Postal Service (USPS).

Investors can gain exposure to the stock via IShares Trust IShares U.S. Transportation ETF IYT and Direxion Daily Transportation Bull 3X Shares TPOR.

Price Action: UPS shares are up 0.30% at $145.80 premarket on the last check Tuesday.

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