UPS Releases 2Q 2024 Earnings

• Consolidated Revenues of $21.8B, Compared to $22.1B Last Year
• Consolidated Operating Margin of 8.9%; Adjusted* Consolidated Operating Margin of 9.5%
• Diluted EPS of $1.65; Adj. Diluted EPS of $1.79, Compared to $2.54 Last Year
• Updates Full-Year 2024 Financial Guidance; Restarts Share Repurchase Program, Targeting $1B Annually

UPS faced challenges in the second quarter of 2024 as volumes declined, although the company’s supply chain solutions division provided some support to its results.

The logistics giant reported consolidated revenues of $21.8 billion for the quarter, marking a 1.1% decline compared to the same period last year.

Operating profit fell to $1.9 billion, a 30.1% decrease year-over-year, with an adjusted operating profit decline of 29.3%.

Revenue in the international segment dropped by 1%, primarily due to a 2.9% decrease in average daily volume. While European volumes saw significant growth, Asian volumes stabilized towards the end of the quarter.

In the U.S. domestic segment, revenue decreased by 1.9%, driven largely by a 2.6% drop in revenue per package due to shifts in product mix.

Conversely, the supply chain solutions division saw a 2.6% revenue increase, largely attributed to growth in logistics and healthcare sectors. UPS highlighted strong e-commerce demand in international air freight as a key factor in the division’s improved performance, driving both volume and revenue growth.

UPS reported its international segment results for the second quarter of 2024, marking a notable shift for the company.

Carol Tomé, UPS CEO, expressed gratitude to employees for their contributions, highlighting the quarter as a pivotal moment as the company achieved its first volume growth in the U.S. in nine quarters. She acknowledged that operating profit had declined in the first half of 2024 compared to the previous year but expressed optimism about a return to profit growth.

Chief Financial Officer Brian Dykes noted improvements in demand across various export regions, which helped boost growth in several profitable lanes outside the U.S.

In a strategic move, UPS also announced plans to acquire Mexican express delivery firm Estafeta, which includes a fleet of six aircraft.

The company has faced recent growth challenges, with consolidated revenue falling to $21.7 billion in the first quarter of 2024, a 5.3% decrease from the same period in 2023. Earlier in the year, UPS revealed plans to cut over 12,000 jobs to streamline costs amid ongoing market challenges.

Looking ahead, UPS forecasts consolidated revenue for 2024 to be around $93 billion, with an anticipated adjusted operating margin of approximately 9.4%.

U.S. Domestic Segment

• Revenue decreased 1.9%, driven by a 2.6% decrease in revenue per piece due primarily to changes in product mix.
• Operating margin was 7.0%; adjusted operating margin was 7.1%.

International Segment

• Revenue decreased 1.0%, driven primarily by a 2.9% decrease in average daily volume.
• Operating margin was 16.4%; adjusted operating margin was 18.9%.

Supply Chain Solutions1

1 Consists of operating segments that do not meet the criteria of a reportable segment under ASC Topic 280 – Segment Reporting.

• Revenue increased 2.6% due primarily to growth in logistics, including healthcare.
• Operating margin was 7.1%; adjusted operating margin was 7.3%.