UPS profit for Q4 2022

A UPS electric vehicle delivery van on December 2, 2022 in London, UK.

Mike Kemp | In pictures | Getty Images

United Parcel Service on Tuesday morning, it reported fourth-quarter revenue that fell short of Wall Street’s expectations and declined year-over-year as the company continues to see lower volumes amid weaker demand.

Here’s How UPS Performed fourth quartercompared to what Wall Street expected, based on average analyst estimates compiled by Refinitiv:

  • Adjusted earnings per share: $3.62 vs. $3.59.
  • Total income: $27.03 billion versus $28.09 billion.

For the three-month period ended Dec. 31, the company reported adjusted net income of $3.15 billion, or $3.62 per share, compared to $3.15 billion, or $3.59 per share, a year earlier.

On Tuesday, the company released its full-year guidance, which came in below analysts’ expectations. He projects revenue between $97 billion and $99.4 billion, compared to analysts’ estimates of $99.98 billion.

Since taking over in 2020, CEO Carol Thomé has championed a “Better, Not More” business strategy, focusing on delivering high margins rather than just increasing volumes. This strategy was put to the test last quarter as lower volumes weighed on revenue.

In the fourth quarter, UPS domestic revenue, which accounts for about two-thirds of the company’s revenue and most of its customer-to-consumer operations, grew 3%. International revenue fell 8% due to lower volumes and weaker demand in China.

The company’s supply chain revenue fell 18% due to a reduction in forwarding services, although this was partly offset by the healthcare segment.

UPS shares rose slightly on low premarket trading volume.

The increase in prices has had a positive effect on the company’s margins, as volumes are reduced and costs are rising. UPS and Rival FedEx increased shipping rates by 6.9% at the end of 2022. Last quarter, UPS also announced that it would cut $500 million in capital expenditures, such as by leasing rather than buying certain seats.

On Tuesday, UPS also forecasts adjusted operating margins of 12.8% to 13.6% for the year. The company expects capital expenditures to be around $5.3 billion after cutting spending to $5 billion last year.

The shipping company’s shares fell more than 10% in 2022 as consumer spending adjusted for inflation and eased from pandemic highs.

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