UPS releases 4Q 2023 earnings

• Consolidated Revenues of $24.9B, Compared to $27.0B Last Year
• Consolidated Operating Margin of 9.9%; Adjusted* Consolidated Operating Margin of 11.2%
• Diluted EPS of $1.87; Adj. Diluted EPS of $2.47, Compared to $3.62 Last Year
• Declares a Quarterly Dividend of $1.63, a $0.01 Increase Per Share

UPS (NYSE:UPS) today announced fourth-quarter 2023 consolidated revenues of $24.9 billion, a 7.8% decrease from the fourth quarter of 2022. Consolidated operating profit was $2.5 billion, down 22.5% compared to the fourth quarter of 2022, and down 27.1% on an adjusted basis. Diluted earnings per share were $1.87 for the quarter; adjusted diluted earnings per share of $2.47 were 31.8% below the same period in 2022.

For the fourth quarter of 2023, GAAP results include a total charge of $512 million, or $0.60 per diluted share, comprised of a non-cash, after-tax mark-to-market (MTM) pension charge of $274 million, after-tax transformation and other charges of $154 million, and a non-cash, after-tax impairment charge of $84 million related to our Coyote trade name in our truckload brokerage unit.

“I want to thank UPSers for providing the best on-time performance of any carrier for the sixth year in a row,” said Carol Tomé, UPS chief executive officer. “2023 was a unique and difficult year and through it all we remained focused on controlling what we could control, stayed on strategy and strengthened our foundation for future growth.”

U.S. Domestic Segment

• Revenue decreased 7.3%, driven by a 7.4% decrease in average daily volume.
• Operating margin was 8.5%; adjusted operating margin was 9.3%.

International Segment

• Revenue decreased 6.9%, driven by an 8.3% decrease in average daily volume primarily due to softness in Europe.
• Operating margin was 19.3%; adjusted operating margin was 19.5%.

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 decreased 11.4% due primarily to market rate declines and excess market capacity in forwarding.
• Operating margin was 4.4%; adjusted operating margin was 9.4%.

Full-Year 2023 Consolidated Results

• Revenue was $91.0 billion, a decrease of 9.3%.
• Operating profit of $9.1 billion; adjusted operating profit of $9.9 billion, down 28.7%.
• Operating margin was 10.0%; adjusted operating margin was 10.9%.
• Diluted EPS totaled $7.80; adjusted diluted EPS of $8.78.
• Adjusted return on invested capital was 21.9%.
• Cash from operations was $10.2 billion and free cash flow was $5.3 billion.

In addition, the Company returned $7.6 billion of cash to shareowners through dividends and share buybacks.

Dividend Declaration

For the 15th consecutive year, the UPS Board of Directors has approved an increase to the company’s quarterly dividend. UPS will pay a first-quarter 2024 dividend of $1.63 per share on all outstanding Class A and Class B shares. The dividend is payable March 8, 2024 to shareowners of record on February 20, 2024.

2024 Outlook

The company provides certain guidance on an adjusted (non-GAAP) basis because it is not possible to predict or provide a reconciliation reflecting the impact of future pension adjustments or other unanticipated events, which would be included in reported (GAAP) results and could be material.

For the full year 2024, UPS expects revenue to range from approximately $92.0 billion to $94.5 billion and consolidated adjusted operating margin to range from approximately 10.0% to 10.6%.

The company is planning capital expenditures of about $4.5 billion and dividend payments of around $5.4 billion, subject to board approval. The effective tax rate is expected to be around 23.5%.

* “Adjusted” or “Adj.” amounts are non-GAAP financial measures. See the appendix to this release for a discussion of non-GAAP financial measures, including a reconciliation to the most closely correlated GAAP measure.