United Parcel Service, Inc. (NYSE:UPS) has outperformed expectations in the first quarter of 2024, with earnings per share of $1.43 surpassing the Zacks Consensus Estimate of $1.33, albeit marking a 35% year-over-year decline. Despite revenues of $21,706 million falling short of the Zacks Consensus Estimate of $21,960.6 million and decreasing by 5.3% year over year, UPS remains on track to meet its 2024 guidance.
In the first quarter, UPS generated $3,316 million in net cash from operating activities, with capital expenditures totaling $1,035 million. Free cash flow amounted to $2,280 million.
Within the U.S. Domestic Package segment, revenues declined by 5% year over year to $14,234 million, primarily driven by a 3.2% decrease in average daily volume. Segmental operating profit (adjusted) plummeted by 43.6% year over year to $839 million, with an adjusted operating margin of 5.9%.
The International Package division reported revenues of $4,256 million, marking a 6.3% year-over-year decrease attributed to a 5.8% decline in average daily volume. Segmental operating profit (adjusted) totaled $682 million, down by 15.4% year over year, with an adjusted operating margin of 16%.
Supply Chain Solutions revenues of $3,216 million experienced a 5.3% year-over-year decline, mainly due to market rate declines in forwarding. However, operating profit (adjusted) dropped by 12.4% to $226 million, with an adjusted operating margin of 7%.
Looking ahead to 2024, UPS reaffirms its guidance, expecting revenues in the range of $92-$94.5 billion and a consolidated adjusted operating margin between 10% and 10.6%. Capital expenditures are projected to be around $4.5 billion, signaling the company’s commitment to continued growth and investment in its operations.
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