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UPS Q4 Earnings & Revenues Beat on Surge in Online Shopping
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United Parcel Service’s (UPS - Free Report) fourth-quarter 2020 earnings (excluding $6.41 from non-recurring items) per share of $2.66 surpassed the Zacks Consensus Estimate of $2.11. The bottom line also improved 26.1% year over year. Results were aided by a boom in online shopping during the holidays with the coronavirus pandemic continuing to restrict people to their homes.
Driven by the e-commerce surge, quarterly revenues at UPS climbed 21% year over year to $24,896 million, surpassing the Zacks Consensus Estimate of $22,785.6 million. Results were aided by a 10.6% rise in consolidated average daily volumes. Also, overall operating profit rose 26% on an adjusted basis in the fourth quarter, boosted by double-digit growth in adjusted operating profit across all segments.
The earnings and revenue beat, driven by higher online shopping, pleased investors. As a result, the stock gained in pre-market trading.
United Parcel Service, Inc. Price, Consensus and EPS Surprise
U.S. Domestic Package revenues increased 17.4% year over year to $15,744 million in the fourth quarter, driven by growth from small and medium-sized businesses. Revenue per piece ascended 7.8%. Segmental operating profit (adjusted) was up 14.3% to $1,379 million in the quarter. Adjusted operating margin in the December quarter was 8.8%.
Revenues at the International Package division summed $4,770 million, up 26.8% on the back of strong demand from Asia and Europe. Average daily volumes rose 21.9%, led by export growth from all regions. Segmental operating profit (adjusted) totaled $1,160 million in the reported quarter, up 43.4%.
Supply Chain and Freight revenues jumped 29% to $4,382 million driven by higher demand for freight forwarding. Operating profits (on an adjusted basis) increased 26.3% to $331 million in the December quarter.
Annual Results
For the full year, UPS’ earnings (on an adjusted basis) came in at $8.23 per share. Revenues increased 14.2% year over year to $84.6 billion. The Zacks Consensus Estimate for earnings was of $7.68 per share while the same for revenues was $82.55 billion.
UPS, currently carrying a Zacks Rank #3 (Hold), generated free cash flow of $5.1 billion in 2020. The company’s capital expenditures (adjusted) were $5.6 billion at the end of 2020. During the year, UPS paid dividends to the tune of $3.6 billion to its shareholders, up 5.2% from the 2019 levels.
Due to the coronavirus-led uncertainty, the company did not provide a 2021 guidance for revenues and earnings per share. However, the current-year projection for capital allocation was announced by UPS. Capital expenditures are expected at around $4 billion. Dividends, subject to the board’s clearance, are expected to grow in 2021. Effective tax rate is predicted to be 23.5%. Moreover, UPS has no plans to buy back shares or tap the debt capital market in 2021.
Sectorial Snapshots
Let’s take a look at some of the other recently released earnings reports from companies within the Zacks Transportation sector.
United Airlines (UAL - Free Report) incurred a loss (excluding 6 cents from non-recurring items) of $7 per share in the fourth quarter of 2020, wider than the Zacks Consensus Estimate of a loss of $6.56. Further, operating revenues of $3,412 million lagged the Zacks Consensus Estimate of $3,420.4 million.
J.B. Hunt Transport Services (JBHT - Free Report) reported earnings of $1.44 per share, which beat the Zacks Consensus Estimate of $1.27. Total operating revenues of $2,737.7 million also surpassed the Zacks Consensus Estimate of $2,514.3 million.
Norfolk Southern Corporation’s (NSC - Free Report) earnings of $2.64 per share surpassed the Zacks Consensus Estimate of $2.48. Moreover, the bottom line improved 3.5% on a year-over-year basis on lower costs.
The company’s railway operating revenues in the quarter under review came in at $2,573 million, outpacing the Zacks Consensus Estimate of $2,556.4 million.
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UPS Q4 Earnings & Revenues Beat on Surge in Online Shopping
United Parcel Service’s (UPS - Free Report) fourth-quarter 2020 earnings (excluding $6.41 from non-recurring items) per share of $2.66 surpassed the Zacks Consensus Estimate of $2.11. The bottom line also improved 26.1% year over year. Results were aided by a boom in online shopping during the holidays with the coronavirus pandemic continuing to restrict people to their homes.
Driven by the e-commerce surge, quarterly revenues at UPS climbed 21% year over year to $24,896 million, surpassing the Zacks Consensus Estimate of $22,785.6 million. Results were aided by a 10.6% rise in consolidated average daily volumes. Also, overall operating profit rose 26% on an adjusted basis in the fourth quarter, boosted by double-digit growth in adjusted operating profit across all segments.
The earnings and revenue beat, driven by higher online shopping, pleased investors. As a result, the stock gained in pre-market trading.
United Parcel Service, Inc. Price, Consensus and EPS Surprise
United Parcel Service, Inc. price-consensus-eps-surprise-chart | United Parcel Service, Inc. Quote
Segmental Details
U.S. Domestic Package revenues increased 17.4% year over year to $15,744 million in the fourth quarter, driven by growth from small and medium-sized businesses. Revenue per piece ascended 7.8%. Segmental operating profit (adjusted) was up 14.3% to $1,379 million in the quarter. Adjusted operating margin in the December quarter was 8.8%.
Revenues at the International Package division summed $4,770 million, up 26.8% on the back of strong demand from Asia and Europe. Average daily volumes rose 21.9%, led by export growth from all regions. Segmental operating profit (adjusted) totaled $1,160 million in the reported quarter, up 43.4%.
Supply Chain and Freight revenues jumped 29% to $4,382 million driven by higher demand for freight forwarding. Operating profits (on an adjusted basis) increased 26.3% to $331 million in the December quarter.
Annual Results
For the full year, UPS’ earnings (on an adjusted basis) came in at $8.23 per share. Revenues increased 14.2% year over year to $84.6 billion. The Zacks Consensus Estimate for earnings was of $7.68 per share while the same for revenues was $82.55 billion.
UPS, currently carrying a Zacks Rank #3 (Hold), generated free cash flow of $5.1 billion in 2020. The company’s capital expenditures (adjusted) were $5.6 billion at the end of 2020. During the year, UPS paid dividends to the tune of $3.6 billion to its shareholders, up 5.2% from the 2019 levels.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Outlook
Due to the coronavirus-led uncertainty, the company did not provide a 2021 guidance for revenues and earnings per share. However, the current-year projection for capital allocation was announced by UPS. Capital expenditures are expected at around $4 billion. Dividends, subject to the board’s clearance, are expected to grow in 2021. Effective tax rate is predicted to be 23.5%. Moreover, UPS has no plans to buy back shares or tap the debt capital market in 2021.
Sectorial Snapshots
Let’s take a look at some of the other recently released earnings reports from companies within the Zacks Transportation sector.
United Airlines (UAL - Free Report) incurred a loss (excluding 6 cents from non-recurring items) of $7 per share in the fourth quarter of 2020, wider than the Zacks Consensus Estimate of a loss of $6.56. Further, operating revenues of $3,412 million lagged the Zacks Consensus Estimate of $3,420.4 million.
J.B. Hunt Transport Services (JBHT - Free Report) reported earnings of $1.44 per share, which beat the Zacks Consensus Estimate of $1.27. Total operating revenues of $2,737.7 million also surpassed the Zacks Consensus Estimate of $2,514.3 million.
Norfolk Southern Corporation’s (NSC - Free Report) earnings of $2.64 per share surpassed the Zacks Consensus Estimate of $2.48. Moreover, the bottom line improved 3.5% on a year-over-year basis on lower costs.
The company’s railway operating revenues in the quarter under review came in at $2,573 million, outpacing the Zacks Consensus Estimate of $2,556.4 million.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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