In a press release, UPS reported consolidated results with increased revenue of 5.6% year-over-year revenues from the third quarter 2023, with a total revenue of $22.2B. Consolidated operating profit increased $2B from the same third quarter of 2023, with a diluted earnings per share of $1.76, up 12.1%.
Embed from Getty ImagesIn the US domestic market, revenue increased 5.8%, as a result of a 6.5% increase in average daily volume, while operating margin was 6.2% or non-GAAP adjusted operating margin of 6.7%. The international segment saw an operating margin of 18.1% or a non-GAAP adjusted operating margin of 18.0% on a revenue increase of 3.4%, due in part to a 2.5% increase in revenue per piece.
During the third quarter of 2024, UPS sold off its Coyote Logistics business to RXO, resulting in GAAP after-tax net benefit of $36 million. This was the result of a $152 million gain from the divestiture and transformation strategy costs of $116 million.
Conference Call Highlights
The conference call was held on October 24 where Ms. Tomé stated that third quarter macroeconomic conditions were worse than expected for the quarter. Headwinds included mostly of decreased online sales in the domestic market and decreased manufacturing here and abroad. She attributed profitability to managing expenses and further development of its Network of the Future.
Ms. Tomé acknowledged the Circle of Honor of truck drivers reaching 25,000 in number for those who achieve milestones of experience and safety. UPS expects to hire nearly 125,000 to meet peak season demand over the holiday season, or a shortened 17-day shipping window between black friday and Christmas Eve.
Embed from Getty ImagesRemaining 2024 Forecast
In a statement in the press release, “I want to thank all UPSers for their hard work and efforts. After a challenging 18-month period, our company returned to revenue and profit growth,” said Carol Tomé, UPS chief executive officer. “Peak season is nearly upon us, and we are ready to deliver another successful holiday season and continue the progress we demonstrated in the third quarter.”
Because of its third quarter disposition of Coyote Logistics, the expected revenue and profits associated with this business had been included in the company’s previously provided revenue and operating margin targets but now have been adjusted accordingly.
For the remainder of 2024, UPS expects its consolidated revenue to be approximately $91.1 billion, increasing the consolidated non-GAAP adjusted operating margin to approximately 9.6%. UPS will have capital expenditures of approximately $4.0 billion and dividend payments expected to be around $5.4 billion, subject to Board approval of course.