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UPS Shares Dip on Q2 Earnings Miss & Dull 2024 Margin View
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Shares of United Parcel Service, Inc. (UPS - Free Report) declined in pre-market trading on Jul 23, 2024. The downside was owing to the disappointing second-quarter 2024 results wherein both earnings and revenues lagged the Zacks Consensus Estimate and dull operating margin view for the full year 2024.
Quarterly earnings of $1.79 per share missed the Zacks Consensus Estimate of $1.98 and declined 29.5% year over year. Revenues of $21.82 billion fell short of the Zacks Consensus Estimate of $22.31 billion and decreased 1.1% year over year.
For 2024, UPS now expects the consolidated adjusted operating margin to be around 9.4% compared with the prior expectation of 10%-10.6%.
United Parcel Service, Inc. Price, Consensus and EPS Surprise
Coming back to the second-quarter earnings report,the overall adjusted operating profit fell 29.3% year over year. The overall adjusted operating margin was 9.5%. UPS generated $1.993 billion of net cash from operating activities in the second quarter of 2024. Capital expenditures were $933 million. Free cash flow was $1.085 billion.
U.S. Domestic Package revenues decreased 1.9% year over year to $14.119 billion, owing to a 2.6% decrease in revenue per piece due primarily to changes in product mix.Segmental operating profit (adjusted) plunged 40.6% year over year to $997 million. The adjusted operating margin for the segment was 7.1%.
Revenues in the International Package division summed $4.370 billion, down 1% year over year owing to a 2.9% decrease in average daily volume. Segmental operating profit (adjusted) totaled $824 million, down 8.6% year over year. The adjusted operating margin for the segment was 18.9%.
Supply Chain Solutions revenues of $3.329 billion increased 2.6% year over year owing to growth in logistics, including healthcare.Operating profit (on an adjusted basis) tumbled 27.7% to $226 million. The adjusted operating margin for the segment was 7.3%.
Remaining Aspects of 2024 Outlook
UPS has updated its full-year 2024 guidance. For 2024, UPS now anticipates revenues to be around $93.0 billion (prior view: $92-$94.5 billion).
Capital expenditures are now anticipated to be around $4 billion (prior view: $4.5 billion).
For 2024, UPS aims to repurchase shares worth $500 million.
So far this year, shares of UPS have lost 7.6% against the industry’s rise of 1.2%.
Image Source: Zacks Investment Research
Performances of Other Transportation Companies
Delta Air Lines (DAL - Free Report) has reported second-quarter 2024 earnings (excluding 35 cents from non-recurring items) of $2.36 per share, which marginally missed the Zacks Consensus Estimate of $2.37. Earnings decreased 11.9% on a year-over-year basis. Apart from high costs, the carrier blamed the discounting pressure at the low end of the market, which hurt its pricing power, for the disappointing performance.
Revenues of $16.65 billion surpassed the Zacks Consensus Estimate of $16.25 billion and increased 6.9% year over year, driven by upbeat air travel demand. Adjusted operating revenues (excluding third-party refinery sales) came in at $15.41 billion, up 5.4% year over year.
J.B. Hunt Transport Services, Inc. (JBHT - Free Report) reported disappointing second-quarter 2024 results wherein both earnings and revenues lagged the Zacks Consensus Estimate.
JBHT’s earnings of $1.32 per share missed the Zacks Consensus Estimate of $1.51 and declined 27% year over year.
JBHT’s total operating revenues of $2.93 billion missed the Zacks Consensus Estimate of $3.03 billion and fell 7% year over year. Total operating revenues, excluding fuel surcharge revenue, fell 6% year over year.The downfall was owing to a 5% decrease in gross revenue per load in Intermodal (JBI) and a decline in load volume of 25% in Integrated Capacity Solutions (ICS), 9% in Truckload (JBT), and 9% in Dedicated Contract Services (DCS). These were partially offset by the 5% revenue growth of Final Mile Services (FMS), primarily driven by new contracts implemented over the past year, and a 5% increase in revenue per load in ICS.
United Airlines Holdings, Inc. (UAL - Free Report) reported second-quarter 2024 earnings per share (EPS) (excluding 18 cents from non-recurring items) of $4.14, which surpassed the Zacks Consensus Estimate of $3.97. Earnings decreased 17.7% on a year-over-year basis.
Operating revenues of $14.98 billion missed the Zacks Consensus Estimate of $15.13 billion. The top line increased 5.7% year over year due to upbeat air-travel demand. This was driven by a 5.2% rise in passenger revenues (which accounted for 91.2% of the top line) to $13.680 billion. Almost 44,375 passengers traveled on UAL flights in the second quarter, up 5.8% year over year.
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UPS Shares Dip on Q2 Earnings Miss & Dull 2024 Margin View
Shares of United Parcel Service, Inc. (UPS - Free Report) declined in pre-market trading on Jul 23, 2024. The downside was owing to the disappointing second-quarter 2024 results wherein both earnings and revenues lagged the Zacks Consensus Estimate and dull operating margin view for the full year 2024.
Quarterly earnings of $1.79 per share missed the Zacks Consensus Estimate of $1.98 and declined 29.5% year over year. Revenues of $21.82 billion fell short of the Zacks Consensus Estimate of $22.31 billion and decreased 1.1% year over year.
For 2024, UPS now expects the consolidated adjusted operating margin to be around 9.4% compared with the prior expectation of 10%-10.6%.
United Parcel Service, Inc. Price, Consensus and EPS Surprise
United Parcel Service, Inc. price-consensus-eps-surprise-chart | United Parcel Service, Inc. Quote
Other Aspects of Q2 Earnings Report
Coming back to the second-quarter earnings report,the overall adjusted operating profit fell 29.3% year over year. The overall adjusted operating margin was 9.5%. UPS generated $1.993 billion of net cash from operating activities in the second quarter of 2024. Capital expenditures were $933 million. Free cash flow was $1.085 billion.
U.S. Domestic Package revenues decreased 1.9% year over year to $14.119 billion, owing to a 2.6% decrease in revenue per piece due primarily to changes in product mix.Segmental operating profit (adjusted) plunged 40.6% year over year to $997 million. The adjusted operating margin for the segment was 7.1%.
Revenues in the International Package division summed $4.370 billion, down 1% year over year owing to a 2.9% decrease in average daily volume. Segmental operating profit (adjusted) totaled $824 million, down 8.6% year over year. The adjusted operating margin for the segment was 18.9%.
Supply Chain Solutions revenues of $3.329 billion increased 2.6% year over year owing to growth in logistics, including healthcare.Operating profit (on an adjusted basis) tumbled 27.7% to $226 million. The adjusted operating margin for the segment was 7.3%.
Remaining Aspects of 2024 Outlook
UPS has updated its full-year 2024 guidance. For 2024, UPS now anticipates revenues to be around $93.0 billion (prior view: $92-$94.5 billion).
Capital expenditures are now anticipated to be around $4 billion (prior view: $4.5 billion).
For 2024, UPS aims to repurchase shares worth $500 million.
Zacks Rank and Price Performance
Currently, UPS carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
So far this year, shares of UPS have lost 7.6% against the industry’s rise of 1.2%.
Image Source: Zacks Investment Research
Performances of Other Transportation Companies
Delta Air Lines (DAL - Free Report) has reported second-quarter 2024 earnings (excluding 35 cents from non-recurring items) of $2.36 per share, which marginally missed the Zacks Consensus Estimate of $2.37. Earnings decreased 11.9% on a year-over-year basis. Apart from high costs, the carrier blamed the discounting pressure at the low end of the market, which hurt its pricing power, for the disappointing performance.
Revenues of $16.65 billion surpassed the Zacks Consensus Estimate of $16.25 billion and increased 6.9% year over year, driven by upbeat air travel demand. Adjusted operating revenues (excluding third-party refinery sales) came in at $15.41 billion, up 5.4% year over year.
J.B. Hunt Transport Services, Inc. (JBHT - Free Report) reported disappointing second-quarter 2024 results wherein both earnings and revenues lagged the Zacks Consensus Estimate.
JBHT’s earnings of $1.32 per share missed the Zacks Consensus Estimate of $1.51 and declined 27% year over year.
JBHT’s total operating revenues of $2.93 billion missed the Zacks Consensus Estimate of $3.03 billion and fell 7% year over year. Total operating revenues, excluding fuel surcharge revenue, fell 6% year over year.The downfall was owing to a 5% decrease in gross revenue per load in Intermodal (JBI) and a decline in load volume of 25% in Integrated Capacity Solutions (ICS), 9% in Truckload (JBT), and 9% in Dedicated Contract Services (DCS). These were partially offset by the 5% revenue growth of Final Mile Services (FMS), primarily driven by new contracts implemented over the past year, and a 5% increase in revenue per load in ICS.
United Airlines Holdings, Inc. (UAL - Free Report) reported second-quarter 2024 earnings per share (EPS) (excluding 18 cents from non-recurring items) of $4.14, which surpassed the Zacks Consensus Estimate of $3.97. Earnings decreased 17.7% on a year-over-year basis.
Operating revenues of $14.98 billion missed the Zacks Consensus Estimate of $15.13 billion. The top line increased 5.7% year over year due to upbeat air-travel demand. This was driven by a 5.2% rise in passenger revenues (which accounted for 91.2% of the top line) to $13.680 billion. Almost 44,375 passengers traveled on UAL flights in the second quarter, up 5.8% year over year.