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United Parcel (UPS) Q2 Earnings & Revenues Beat, Dip Y/Y
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United Parcel Service, Inc. (UPS - Free Report) second-quarter 2023 earnings per share (EPS) of $2.54 beat the Zacks Consensus Estimate of $2.51 but declined 22.8% year over year. Revenues of $22,055 million fell short of the Zacks Consensus Estimate of $22,879.7 million but decreased 10.9% year over year.
The overall adjusted operating profit fell 18.4% year over year to $2,919 million in the second quarter.
UPS generated $3,237 million of cash from operating activities in the second quarter. Capital expenditures were $1,211 million. Free cash flow was $2,066 million.
United Parcel Service, Inc. Price, Consensus and EPS Surprise
U.S. Domestic Package revenues decreased 6.9% year over year to $14,396 million in the second quarter, driven by a 9.9% decrease in average daily volume, partially offset by a 3.3% increase in revenue per piece. Segmental operating profit (adjusted) fell 9.4% year over year to $1,681 million in the reported quarter. The adjusted operating margin for the segment was 11.7% in the second quarter.
Revenues at the International Package division summed $4,415 million, down 13% year over year. The downfall was due to a 6.6% reduction in average daily volume and continued softness on Asia trade lanes. Segmental operating profit (adjusted) totaled $902 million in the reported quarter, down 25% year over year. The adjusted operating margin for the segment was 20.4% in the second quarter.
Supply Chain and Freight revenues of $3,244 million fell 23.4% year over year due to market rate and volume declines in forwarding, partially offset by growth in logistics, including healthcare. Operating profit (on an adjusted basis) fell 35% to $336 million in the second quarter. The adjusted operating margin for the segment was 10.4% in the second quarter.
2023 Outlook
For 2023, United Parcel now anticipates revenues to be around $93 billion (prior view: $97 billion). The consolidated adjusted operating margin is now expected to be around 11.8% (prior view: 12.8%).
Capital expenditures are still anticipated to be around $5.3 billion. Further, UPS anticipates dividend payments of $5.4 billion and share repurchases of $3 billion for the year.
J.B. Hunt Transport Services, Inc.’s (JBHT - Free Report) second-quarter 2023 EPS of $1.81 missed the Zacks Consensus Estimate of $1.97 and declined 25.2% year over year.
JBHT’s total operating revenues of $3,132.6 million also lagged the Zacks Consensus Estimate of $3,347.5 million and fell 18.4% year over year. The downfall was due to a decline in revenue per load of 24% in Integrated Capacity Solutions, 13% in Intermodal, 21% in Truckload and a 4% decline in productivity in Dedicated Capacity Solutions on the back of changes in customer rate, freight mix and lower fuel surcharge revenue.
Total operating revenues, excluding fuel surcharges, decreased 14% year over year.
Delta Air Lines (DAL - Free Report) reported better-than-expected revenues and EPS, driven by strong air-travel demand. DAL’s second-quarter 2023 EPS (excluding 16 cents from non-recurring items) of $2.68 comfortably beat the Zacks Consensus Estimate of $2.42. DAL reported EPS of $1.44 a year ago, dull compared to the current scenario, as air-travel demand was not so buoyant then.
DAL’s total revenues of $15,578 million beat the Zacks Consensus Estimate of $14,991.6 million. Total revenues increased 12.69% on a year-over-year basis, driven by higher air-travel demand.
United Airlines Holdings, Inc. (UAL - Free Report) reported second-quarter 2023 EPS of $5.03, which outpaced the Zacks Consensus Estimate of $3.99 and improved more than 100% year over year.
Operating revenues of $14,178 million beat the Zacks Consensus Estimate of $13,927.1 million. UAL’s revenues increased 17.1% year over year due to upbeat air-travel demand. The year-over-year increase in the top line was driven by a 20.1% rise in passenger revenues (accounting for 91.7% of the top line) to $13,002 million. Nearly 42 million passengers traveled on UAL flights in the second quarter.
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United Parcel (UPS) Q2 Earnings & Revenues Beat, Dip Y/Y
United Parcel Service, Inc. (UPS - Free Report) second-quarter 2023 earnings per share (EPS) of $2.54 beat the Zacks Consensus Estimate of $2.51 but declined 22.8% year over year. Revenues of $22,055 million fell short of the Zacks Consensus Estimate of $22,879.7 million but decreased 10.9% year over year.
The overall adjusted operating profit fell 18.4% year over year to $2,919 million in the second quarter.
UPS generated $3,237 million of cash from operating activities in the second quarter. Capital expenditures were $1,211 million. Free cash flow was $2,066 million.
United Parcel Service, Inc. Price, Consensus and EPS Surprise
United Parcel Service, Inc. price-consensus-eps-surprise-chart | United Parcel Service, Inc. Quote
Segmental Details
U.S. Domestic Package revenues decreased 6.9% year over year to $14,396 million in the second quarter, driven by a 9.9% decrease in average daily volume, partially offset by a 3.3% increase in revenue per piece. Segmental operating profit (adjusted) fell 9.4% year over year to $1,681 million in the reported quarter. The adjusted operating margin for the segment was 11.7% in the second quarter.
Revenues at the International Package division summed $4,415 million, down 13% year over year. The downfall was due to a 6.6% reduction in average daily volume and continued softness on Asia trade lanes. Segmental operating profit (adjusted) totaled $902 million in the reported quarter, down 25% year over year. The adjusted operating margin for the segment was 20.4% in the second quarter.
Supply Chain and Freight revenues of $3,244 million fell 23.4% year over year due to market rate and volume declines in forwarding, partially offset by growth in logistics, including healthcare. Operating profit (on an adjusted basis) fell 35% to $336 million in the second quarter. The adjusted operating margin for the segment was 10.4% in the second quarter.
2023 Outlook
For 2023, United Parcel now anticipates revenues to be around $93 billion (prior view: $97 billion). The consolidated adjusted operating margin is now expected to be around 11.8% (prior view: 12.8%).
Capital expenditures are still anticipated to be around $5.3 billion. Further, UPS anticipates dividend payments of $5.4 billion and share repurchases of $3 billion for the year.
Currently, United Parcel carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performances of Other Transportation Companies
J.B. Hunt Transport Services, Inc.’s (JBHT - Free Report) second-quarter 2023 EPS of $1.81 missed the Zacks Consensus Estimate of $1.97 and declined 25.2% year over year.
JBHT’s total operating revenues of $3,132.6 million also lagged the Zacks Consensus Estimate of $3,347.5 million and fell 18.4% year over year. The downfall was due to a decline in revenue per load of 24% in Integrated Capacity Solutions, 13% in Intermodal, 21% in Truckload and a 4% decline in productivity in Dedicated Capacity Solutions on the back of changes in customer rate, freight mix and lower fuel surcharge revenue.
Total operating revenues, excluding fuel surcharges, decreased 14% year over year.
Delta Air Lines (DAL - Free Report) reported better-than-expected revenues and EPS, driven by strong air-travel demand. DAL’s second-quarter 2023 EPS (excluding 16 cents from non-recurring items) of $2.68 comfortably beat the Zacks Consensus Estimate of $2.42. DAL reported EPS of $1.44 a year ago, dull compared to the current scenario, as air-travel demand was not so buoyant then.
DAL’s total revenues of $15,578 million beat the Zacks Consensus Estimate of $14,991.6 million. Total revenues increased 12.69% on a year-over-year basis, driven by higher air-travel demand.
United Airlines Holdings, Inc. (UAL - Free Report) reported second-quarter 2023 EPS of $5.03, which outpaced the Zacks Consensus Estimate of $3.99 and improved more than 100% year over year.
Operating revenues of $14,178 million beat the Zacks Consensus Estimate of $13,927.1 million. UAL’s revenues increased 17.1% year over year due to upbeat air-travel demand. The year-over-year increase in the top line was driven by a 20.1% rise in passenger revenues (accounting for 91.7% of the top line) to $13,002 million. Nearly 42 million passengers traveled on UAL flights in the second quarter.