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United Parcel (UPS) Q1 Earnings Beat Estimates, Revenues Lag
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United Parcel Service, Inc. (UPS - Free Report) reported mixed first-quarter 2023 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same.
Quarterly earnings of $2.20 per share beat the Zacks Consensus Estimate by a penny but declined 27.9% year over year. Revenues of $22,925 million fell short of the Zacks Consensus Estimate of $22,935.2 million and decreased 5.9% year over year.
The overall adjusted operating profit fell 22.8% year over year to $2,552 million in the first quarter.
United Parcel Service, Inc. Price, Consensus and EPS Surprise
UPS generated $2,357 million of cash from operating activities in the first quarter. Capital expenditures came in at $609 million. Free cash flow was $1,770 million.
Segmental Details
U.S. Domestic Package revenues decreased 0.9% year over year to $14,987 million in the first quarter, driven by a 5.4% decrease in average daily volume, nearly offset by a 4.8% increase in revenue per piece. Segmental operating profit (adjusted) fell 12.7% year over year to $1,488 million in the quarter. The adjusted operating margin for the segment was 9.9% in the first quarter.
Revenues at the International Package division summed $4,543 million, down 6.8% year over year. The downfall was due to a 6.2% reduction in average daily volume due to lower domestic volume and softness in China’s trade lanes. Segmental operating profit (adjusted) totaled $806 million in the reported quarter, down 28% year over year. The adjusted operating margin for the segment was 17.7% in the first quarter.
Supply Chain and Freight revenues of $3,395 million fell 22.5% year over year due to market rate and volume declines in forwarding, partially offset by growth in UPS’ healthcare business. Operating profit (on an adjusted basis) fell 46.4% to $258 million in the first quarter. The adjusted operating margin for the segment was 7.6% in the first quarter.
2023 Outlook
For 2023, United Parcel now anticipates revenues to be around $97 billion (prior view: $97-$99.4 billion). The consolidated adjusted operating margin is now expected to be around 12.8% (prior view: between 12.8% and 13.6%).
Capital expenditures are still anticipated to be around $5.3 billion. Further, UPS anticipates paying dividend payments of $5.4 billion and share repurchases to be $3 billion.
Currently, United Parcel carries a Zacks Rank #4 (Sell).
J.B. Hunt Transport Services, Inc.’s (JBHT - Free Report) first-quarter 2023 earnings of $1.89 per share missed the Zacks Consensus Estimate of $2.04 and declined 17.5% year over year.
JBHT’s total operating revenues of $3,229.58 million also lagged the Zacks Consensus Estimate of $3,434.4 million and fell 7.4% year over year. The downfall was due to declines in the volume of 25% in Integrated Capacity Solutions (ICS), 5% in Intermodal (JBI) and 17% in Final Mile Services (FMS), and a 17% decline in revenue per load in Truckload (JBT). Revenue declines in ICS, JBI, FMS and JBT were partially offset by Dedicated Contract Services revenue growth of 13%.
JBHT’s total operating revenues, excluding fuel surcharges, decreased 10.2% year over year.
Delta Air Lines’ (DAL - Free Report) first-quarter 2023 earnings (excluding 82 cents from non-recurring items) of 25 cents per share missed the Zacks Consensus Estimate of 29 cents. Volatile fuel prices and unfavorable weather conditions led to this downtick. DAL reported a loss of $1.23 per share a year ago, dull in comparison to the current scenario, as air-travel demand was not so buoyant then.
DAL reported revenues of $12,759 million, which missed the Zacks Consensus Estimate of $12,767.4 million. Driven by higher air-travel demand, total revenues increased 36.49% on a year-over-year basis.
Alaska Air Group, Inc. (ALK - Free Report) reported first-quarter 2023loss of 62 cents per share, wider than the Zacks Consensus Estimate of a loss of 48 cents. In the year-ago quarter, ALK incurred a loss of $1.33 per share.
ALK’s operating revenues of $ 2,196 million missed the Zacks Consensus Estimate of $2,202.5 million. The top line jumped 31% year over year, with passenger revenues accounting for 90.3% of the top line and increasing 31% owing to continued recovery in air-travel demand.
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United Parcel (UPS) Q1 Earnings Beat Estimates, Revenues Lag
United Parcel Service, Inc. (UPS - Free Report) reported mixed first-quarter 2023 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same.
Quarterly earnings of $2.20 per share beat the Zacks Consensus Estimate by a penny but declined 27.9% year over year. Revenues of $22,925 million fell short of the Zacks Consensus Estimate of $22,935.2 million and decreased 5.9% year over year.
The overall adjusted operating profit fell 22.8% year over year to $2,552 million in the first quarter.
United Parcel Service, Inc. Price, Consensus and EPS Surprise
United Parcel Service, Inc. price-consensus-eps-surprise-chart | United Parcel Service, Inc. Quote
UPS generated $2,357 million of cash from operating activities in the first quarter. Capital expenditures came in at $609 million. Free cash flow was $1,770 million.
Segmental Details
U.S. Domestic Package revenues decreased 0.9% year over year to $14,987 million in the first quarter, driven by a 5.4% decrease in average daily volume, nearly offset by a 4.8% increase in revenue per piece. Segmental operating profit (adjusted) fell 12.7% year over year to $1,488 million in the quarter. The adjusted operating margin for the segment was 9.9% in the first quarter.
Revenues at the International Package division summed $4,543 million, down 6.8% year over year. The downfall was due to a 6.2% reduction in average daily volume due to lower domestic volume and softness in China’s trade lanes. Segmental operating profit (adjusted) totaled $806 million in the reported quarter, down 28% year over year. The adjusted operating margin for the segment was 17.7% in the first quarter.
Supply Chain and Freight revenues of $3,395 million fell 22.5% year over year due to market rate and volume declines in forwarding, partially offset by growth in UPS’ healthcare business. Operating profit (on an adjusted basis) fell 46.4% to $258 million in the first quarter. The adjusted operating margin for the segment was 7.6% in the first quarter.
2023 Outlook
For 2023, United Parcel now anticipates revenues to be around $97 billion (prior view: $97-$99.4 billion). The consolidated adjusted operating margin is now expected to be around 12.8% (prior view: between 12.8% and 13.6%).
Capital expenditures are still anticipated to be around $5.3 billion. Further, UPS anticipates paying dividend payments of $5.4 billion and share repurchases to be $3 billion.
Currently, United Parcel carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performances of Other Transportation Companies
J.B. Hunt Transport Services, Inc.’s (JBHT - Free Report) first-quarter 2023 earnings of $1.89 per share missed the Zacks Consensus Estimate of $2.04 and declined 17.5% year over year.
JBHT’s total operating revenues of $3,229.58 million also lagged the Zacks Consensus Estimate of $3,434.4 million and fell 7.4% year over year. The downfall was due to declines in the volume of 25% in Integrated Capacity Solutions (ICS), 5% in Intermodal (JBI) and 17% in Final Mile Services (FMS), and a 17% decline in revenue per load in Truckload (JBT). Revenue declines in ICS, JBI, FMS and JBT were partially offset by Dedicated Contract Services revenue growth of 13%.
JBHT’s total operating revenues, excluding fuel surcharges, decreased 10.2% year over year.
Delta Air Lines’ (DAL - Free Report) first-quarter 2023 earnings (excluding 82 cents from non-recurring items) of 25 cents per share missed the Zacks Consensus Estimate of 29 cents. Volatile fuel prices and unfavorable weather conditions led to this downtick. DAL reported a loss of $1.23 per share a year ago, dull in comparison to the current scenario, as air-travel demand was not so buoyant then.
DAL reported revenues of $12,759 million, which missed the Zacks Consensus Estimate of $12,767.4 million. Driven by higher air-travel demand, total revenues increased 36.49% on a year-over-year basis.
Alaska Air Group, Inc. (ALK - Free Report) reported first-quarter 2023 loss of 62 cents per share, wider than the Zacks Consensus Estimate of a loss of 48 cents. In the year-ago quarter, ALK incurred a loss of $1.33 per share.
ALK’s operating revenues of $ 2,196 million missed the Zacks Consensus Estimate of $2,202.5 million. The top line jumped 31% year over year, with passenger revenues accounting for 90.3% of the top line and increasing 31% owing to continued recovery in air-travel demand.