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UPS Stock Gains on Q4 Earnings, Revenue Beat and Dividend Hike
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United Parcel Service (UPS - Free Report) reported fourth-quarter 2021 earnings (excluding 7 cents from non-recurring items) of $3.59 per share, beating the Zacks Consensus Estimate of $3.11. The bottom line jumped 35% year over year with strong performances across all segments.
Quarterly revenues of $27,771 million also outperformed the Zacks Consensus Estimate of $27,179.6 million. The top line increased 11.5% year over year, driven by higher shipping rates and upbeat e-commerce demand.
The outperformance apart, UPS’ board of directors cleared a 49% dividend increase to $1.52 per share on all outstanding Class A and Class B shares. The dividend will be paid out on Mar 10, 2022, to its shareholders of record on Feb 22. The solid earnings report and the dividend hike naturally pleased investors. As a result, the stock gained significantly in pre-market trading.
United Parcel Service, Inc. Price, Consensus and EPS Surprise
Overall adjusted operating profit rose 37.7% year over year to $3,952 million in the fourth quarter, boosted by double-digit growth in the adjusted operating profit across all segments. In 2021, UPS generated free cash flow of $10,889 million, up more than 100% year over year. UPS’s capital expenditures were $4,194 million at the end of the same period.
Segmental Details for Q4
U.S. Domestic Package revenues increased 12.4% year over year to $17,697 million. Segmental operating profit (adjusted) jumped 57% year over year to $2,165 million in the quarter. Revenue per piece increased 10.5%. Adjusted operating margin in the December quarter was 12.2%.
Revenues at the International Package division summed $5,397 million, up 13.1%. Revenue per piece increased 16.4%. The segment’s performance was driven by strong growth in all regions. Segmental operating profit (adjusted) totaled $1,331 million in the reported quarter, up 14.7%. Adjusted operating margin was 24.7%.
Supply Chain Solutions revenues augmented 6.7% to $4,677 million, aided primarily by the upbeat performances of Forwarding and Logistics businesses. Operating profit (on an adjusted basis) soared 37.8% to $456 million in the December quarter.
2022 Outlook
UPS, currently carrying a Zacks Rank #3 (Hold), expects consolidated revenues of about $102 billion, an adjusted operating margin of approximately 13.7% and an adjusted return on invested capital to be above 30%. UPS expects to achieve its 2023 targets for consolidated revenues and operating margin in 2022 itself. The Zacks Consensus Estimate for 2022 revenues is currently pegged at $99.58 billion.
The company expects capital expenditures to be 5.4% of revenues (approximately $5.5 billion). Dividends and share buybacks are anticipated to be around $5.2 billion and at least $1 billion, respectively. Effective tax rate of around 23% is expected by UPS for the current year.
Sectorial Snapshots
Let’s take a look at some of the other earnings releases from companies within the Zacks Transportation sector.
CSX Corporation’s (CSX - Free Report) fourth-quarter 2021 earnings of 42 cents per share surpassed the Zacks Consensus Estimate by a penny. The bottom line improved in double digits year over year owing to higher revenues.
Total revenues of $3,427 million outperformed the Zacks Consensus Estimate of $3296 million. The top line jumped 21.3% year over year owing to growth across all its businesses, and revenues from Quality Carriers, which the company acquired in July 2021. Fourth-quarter operating income climbed 12% to $1,366 million.
J.B. Hunt Transport Services (JBHT - Free Report) reported fourth-quarter 2021 earnings of $2.28 per share. The figure surpassed the Zacks Consensus Estimate of $1.99. The bottom line surged 58.3% year over year on the back of higher revenues across all segments.
J.B. Hunt’s operating revenues of $3,497 million also outperformed the Zacks Consensus Estimate of $3,287.8 million. The top line increased 27.7% year over year. Total operating revenues, excluding fuel surcharges, rose 21.7% year over year.
United Airlines (UAL - Free Report) incurred a loss (excluding 39 cents from non-recurring items) of $1.60 per share in fourth-quarter 2021, narrower than the Zacks Consensus Estimate of a loss of $2.23. The amount of loss narrowed 77.1% year over year.
United Airlines’ operating revenues of $8,192 million also outperformed the Zacks Consensus Estimate of $7,930.9 million. The top line surged more than 100% year over year, with passenger revenues contributing 84% to the top line and surging 185.4% to $6,878 million.
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UPS Stock Gains on Q4 Earnings, Revenue Beat and Dividend Hike
United Parcel Service (UPS - Free Report) reported fourth-quarter 2021 earnings (excluding 7 cents from non-recurring items) of $3.59 per share, beating the Zacks Consensus Estimate of $3.11. The bottom line jumped 35% year over year with strong performances across all segments.
Quarterly revenues of $27,771 million also outperformed the Zacks Consensus Estimate of $27,179.6 million. The top line increased 11.5% year over year, driven by higher shipping rates and upbeat e-commerce demand.
The outperformance apart, UPS’ board of directors cleared a 49% dividend increase to $1.52 per share on all outstanding Class A and Class B shares. The dividend will be paid out on Mar 10, 2022, to its shareholders of record on Feb 22. The solid earnings report and the dividend hike naturally pleased investors. As a result, the stock gained significantly 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
Overall adjusted operating profit rose 37.7% year over year to $3,952 million in the fourth quarter, boosted by double-digit growth in the adjusted operating profit across all segments. In 2021, UPS generated free cash flow of $10,889 million, up more than 100% year over year. UPS’s capital expenditures were $4,194 million at the end of the same period.
Segmental Details for Q4
U.S. Domestic Package revenues increased 12.4% year over year to $17,697 million. Segmental operating profit (adjusted) jumped 57% year over year to $2,165 million in the quarter. Revenue per piece increased 10.5%. Adjusted operating margin in the December quarter was 12.2%.
Revenues at the International Package division summed $5,397 million, up 13.1%. Revenue per piece increased 16.4%. The segment’s performance was driven by strong growth in all regions. Segmental operating profit (adjusted) totaled $1,331 million in the reported quarter, up 14.7%. Adjusted operating margin was 24.7%.
Supply Chain Solutions revenues augmented 6.7% to $4,677 million, aided primarily by the upbeat performances of Forwarding and Logistics businesses. Operating profit (on an adjusted basis) soared 37.8% to $456 million in the December quarter.
2022 Outlook
UPS, currently carrying a Zacks Rank #3 (Hold), expects consolidated revenues of about $102 billion, an adjusted operating margin of approximately 13.7% and an adjusted return on invested capital to be above 30%. UPS expects to achieve its 2023 targets for consolidated revenues and operating margin in 2022 itself. The Zacks Consensus Estimate for 2022 revenues is currently pegged at $99.58 billion.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The company expects capital expenditures to be 5.4% of revenues (approximately $5.5 billion). Dividends and share buybacks are anticipated to be around $5.2 billion and at least $1 billion, respectively. Effective tax rate of around 23% is expected by UPS for the current year.
Sectorial Snapshots
Let’s take a look at some of the other earnings releases from companies within the Zacks Transportation sector.
CSX Corporation’s (CSX - Free Report) fourth-quarter 2021 earnings of 42 cents per share surpassed the Zacks Consensus Estimate by a penny. The bottom line improved in double digits year over year owing to higher revenues.
Total revenues of $3,427 million outperformed the Zacks Consensus Estimate of $3296 million. The top line jumped 21.3% year over year owing to growth across all its businesses, and revenues from Quality Carriers, which the company acquired in July 2021. Fourth-quarter operating income climbed 12% to $1,366 million.
J.B. Hunt Transport Services (JBHT - Free Report) reported fourth-quarter 2021 earnings of $2.28 per share. The figure surpassed the Zacks Consensus Estimate of $1.99. The bottom line surged 58.3% year over year on the back of higher revenues across all segments.
J.B. Hunt’s operating revenues of $3,497 million also outperformed the Zacks Consensus Estimate of $3,287.8 million. The top line increased 27.7% year over year. Total operating revenues, excluding fuel surcharges, rose 21.7% year over year.
United Airlines (UAL - Free Report) incurred a loss (excluding 39 cents from non-recurring items) of $1.60 per share in fourth-quarter 2021, narrower than the Zacks Consensus Estimate of a loss of $2.23. The amount of loss narrowed 77.1% year over year.
United Airlines’ operating revenues of $8,192 million also outperformed the Zacks Consensus Estimate of $7,930.9 million. The top line surged more than 100% year over year, with passenger revenues contributing 84% to the top line and surging 185.4% to $6,878 million.