UPS beats first quarter earnings and revenue, doubles buyout plan – April 26, 2022

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United Parcel Service (UPS Free Report) reported first-quarter 2022 earnings (excluding 2 cents of one-time items) of $3.05 per share, beating Zacks’ consensus estimate of $2.87. Net income jumped 10.11% year-on-year with strong performance across all segments.

Quarterly revenue of $24,378 million also topped Zacks’ consensus estimate of $23,896 million. Revenue increased 6.42% year-over-year, driven by favorable pricing and buoyant e-commerce demand.

Overall adjusted operating profit increased 12.1% year-over-year to $3,306 million in the first quarter, driven by adjusted operating profit growth across all segments. In the first quarter of 2022, UPS generated free cash flow of $3,915 million, compared to $3,712 million in the first quarter of 2021. UPS capital expenditures were $548 million at the end of the same period.

Additionally, the UPS Board of Directors decided to double its share buyback target for the current year to $2 billion.

Details by segment for the 1st quarter

U.S. domestic package revenue increased 8% year-over-year to $15,124 million. Segment operating income (adjusted) increased 16.5% year-over-year to $1,705 million in the quarter. Revenue per piece increased by 9.5%. The March quarter adjusted operating margin was 11.3%.

International Packages division revenue totaled $4,876 million, up 5.8% year-over-year. Revenue per piece increased 10.5% year over year. The segment’s performance was driven by strong growth in all regions. Segment operating income (adjusted) totaled $1,120 million in the current quarter, up 2.7% year-over-year. The adjusted operating margin is 23%.

Supply-Chain Solutions’ revenues increased slightly by 2% to reach $4,378 million, mainly helped by the good performance of the Forwarding activity. Operating profit (on an adjusted basis) increased 21.8% to $481 million in the March quarter.

2022 outlook intact

UPS, currently ranked Zacks Rank #3 (Hold), still expects consolidated revenue of approximately $102 billion, an adjusted operating margin of approximately 13.7% and an adjusted return on invested capital of over 30 %. Zacks’ consensus estimate for 2022 revenue is currently pegged at $102.25 billion.

You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

UPS reiterates its capital expenditures at 5.4% of revenue (approximately $5.5 billion). Dividends are withheld $5.2 billion.

Revenue Insights

In the broader transport sector, JB Hunt Transportation Services (JBHT Free report) CSX Corporation (CSX free report) and United Airlines (LAU Free report) recently released its first quarter 2022 results.

J.B. Hunt announced better-than-expected results for the first quarter of 2022. Quarterly earnings of $2.29 per share beat Zacks’ consensus estimate of $1.91. Net income jumped 67.2% year-over-year on higher revenue across all segments.

Total operating revenue of $3,488.6 million also topped Zacks’ consensus estimate of $3,260.5 million. Revenue jumped 33.3% year-over-year.

CSX Corp.First-quarter 2022 earnings of 39 cents per share beat Zacks’ consensus estimate by a penny despite lower overall volumes as supply chain issues continued to hurt results. Net income improved 25.81% year over year on higher revenue, helped by increased shipping rates.

Total revenue of $3,413 million topped Zacks’ consensus estimate of $3,291.2 million. Revenue increased by 21.33% year-on-year.

United Airlines suffered a loss of $4.24 per share in the first quarter of 2022, higher than the Zacks consensus estimate of a loss of $4.19. It is the ninth straight quarterly loss suffered by UAL as coronavirus concerns continue to weigh on demand for air travel.

Operating revenue of $7,566 million was also below Zacks’ consensus estimate of $7,657.2 million.

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