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.
