10-QPeriod: Q3 FY2024

UNITED PARCEL SERVICE INC Quarterly Report for Q3 Ended Sep 30, 2024

Filed November 6, 2024For Securities:UPS

Summary

United Parcel Service, Inc. (UPS) reported solid financial results for the third quarter of 2024, demonstrating resilience despite ongoing macroeconomic challenges. Revenue increased by 5.6% year-over-year to $22.2 billion, driven by a robust 6.5% rise in U.S. Domestic Package average daily volume and a 3.4% increase in International Package revenue, bolstered by strong export growth. Operating profit saw a significant surge of 47.8% to $1.99 billion, reflecting improved operational efficiencies and the positive impact of strategic initiatives like 'Fit to Serve' and the 'Network of the Future' program, which are contributing to cost management. Key financial highlights include a 36.6% increase in Net Income to $1.54 billion, leading to a Diluted Earnings Per Share of $1.80. The company also completed the divestiture of its truckload brokerage business, Coyote, for $1.002 billion, recognizing a pre-tax gain of $156 million. UPS continues to prioritize returns to shareholders, repurchasing $500 million in stock and paying dividends totaling $4.05 billion year-to-date, while maintaining a strong liquidity position with $6.1 billion in cash, cash equivalents, and marketable securities. The company anticipates continued revenue and operating profit growth in the fourth quarter, supported by expected volume increases and ongoing focus on revenue quality and network optimization.

Financial Highlights

51 data points
Beta

Revenue

$22.25B

Net Income

$1.54B

6.9% Net Margin

EPS (Diluted)

$1.80

Total Assets

$68.26B

Cash & Equivalents

$5.86B

Free Cash Flow

$655.00M

Financial Statements
Beta
Revenue$22.25B
Operating Expenses$20.26B
Operating Income$1.99B
Net Income$1.54B
EPS (Basic)$1.80
EPS (Diluted)$1.80
Shares Outstanding (Basic)855.00M
Shares Outstanding (Diluted)855.00M

Key Highlights

  • 1Revenue increased by 5.6% to $22.2 billion for the third quarter of 2024, compared to the prior year.
  • 2Operating profit surged by 47.8% to $1.99 billion in the third quarter.
  • 3Net Income rose significantly by 36.6% to $1.54 billion for the third quarter.
  • 4Diluted Earnings Per Share (EPS) was $1.80 for the third quarter, a 37.4% increase year-over-year.
  • 5Completed the divestiture of Coyote, the truckload brokerage business, for $1.002 billion in cash proceeds.
  • 6Returned $500 million to shareholders through share repurchases and paid $4.05 billion in dividends year-to-date.
  • 7Maintained a strong liquidity position with $6.1 billion in cash, cash equivalents, and marketable securities as of September 30, 2024.

Frequently Asked Questions

Revenue growth was primarily driven by a strong increase in average daily package volume, particularly in the U.S. Domestic Package segment (up 6.5%) and positive growth in International Package export volumes. Strategic pricing adjustments and operational efficiencies also contributed to revenue quality and growth.

The divestiture of Coyote, completed on September 16, 2024, generated $1.002 billion in cash proceeds and resulted in a pre-tax gain of $156 million ($152 million after tax) recognized in the third quarter. This gain positively impacted operating profit and net income for the period.

UPS anticipates continued growth in consolidated revenue and operating profit for the fourth quarter. This positive outlook is based on expected volume growth, particularly from SMBs and the Digital Access Program, and the company's continued focus on revenue quality, operational efficiencies from initiatives like 'Fit to Serve', and network optimization for the holiday shipping season.

UPS is managing operating expenses through a combination of strategies, including productivity improvements from initiatives like the 'Network of the Future' program, which has improved pieces per workforce hour. Benefits from the 'Fit to Serve' initiative are also contributing to cost moderation. While compensation and benefits expenses have increased due to contractual wage rate increases for its union workforce, the company expects wage rate growth to moderate in the fourth quarter as it enters the second year of its contract with the International Brotherhood of Teamsters.