UPS Q2 Earnings: Revenue And EPS Miss, Annual Outlook Cut, Restarts Stock Buyback

United Parcel Service Inc UPS shares are trading lower after it reported second-quarter 2024 results.

Revenue declined 1.1% year-over-year to $21.82 billion, missing the consensus of $22.183 billion. Adjusted EPS was $1.79, down 29.5% YoY, missing the consensus of $1.99.

Consolidated operating profit fell 30.1% YoY to $1.9 billion; consolidated operating margin stood at 8.9%, while adjusted consolidated operating margin was 9.5%.

U.S. Domestic Segment revenue fell 1.9% YoY to $14.12 billion, reflecting a 2.6% decrease in revenue per piece due to changes in product mix. The adjusted operating margin stood at 7.1%.

International Segment revenue decreased by 1% YoY to $4.37 billion, owing to a 2.9% decrease in average daily volume. The adjusted operating margin was 18.9%.

Supply Chain Solutions Segment revenue increased by 2.6% to $3.33 billion, reflecting growth in logistics, including healthcare. The adjusted operating margin was 7.3%.

UPS’ operating cash flow for six months ended June 30, 2024, totaled $5.309 billion, and free cash flow was $3.365 billion.

2024 Outlook, updated: UPS now expects revenue of ~$93 billion (prior $92 billion-$94.5 billion) versus the $92.794 billion consensus and sees an adjusted operating margin of 9.4% (prior 10%-10.6%).

UPS expects 2024 capital expenditures of about $4 billion.

The company restarted its repurchase program, targeting around $1 billion annually.

Yesterday, UPS announced the acquisition of Estafeta, a Mexican express delivery company, to leverage Mexico’s manufacturing boom, global supply chain shifts, and North American trade growth. This move aligns with UPS’s strategy to enhance its global logistics capabilities, providing seamless service and greater efficiency.

Price Action: UPS shares are trading lower by 7.77% at $133.90 premarket at the last check on Tuesday.

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