UPS' Q3 Earnings & Revenues Surpass Estimates, Increase Y/Y
Strong performance across all segments aids UPS' Q3 results.
United Parcel Service UPS reported third-quarter 2021 earnings (excluding 6 cents from non-recurring items) of $2.71 per share, beating the Zacks Consensus Estimate of $2.52. The bottom line jumped 18.9% year over year with strong performances across all segments.
United Parcel Service, Inc. Price and EPS Surprise
Quarterly revenues of $23,184 million also outperformed the Zacks Consensus Estimate of $22,612.2 million. The top line increased 9.2% year over year, driven by upbeat demand for e-commerce-related package deliveries. Overall operating profit rose 23.4% year over year to $2,970 million in the third quarter, boosted by double-digit growth in the adjusted operating profit across all segments.
In the first nine months of 2021, UPS generated free cash flow of $9,265 million, up 52.3% from the comparable period’s figure in 2020. The company’s capital expenditures were $2,570 million at the end of the same period.
Segmental Details for Q3
U.S. Domestic Package revenues increased 7.4% year over year to $14,208 million. Segmental operating profit (adjusted) jumped 24.8% year over year to $1,414 million in the quarter. Revenue per piece increased 12%. Adjusted operating margin in the September quarter was 10%.
Revenues at the International Package division summed $4,270 million, up 15.5%. The segment’s performance was driven by strong growth in all regions. Segmental operating profit (adjusted) totaled $1,108 million in the reported quarter, up 14%. Adjusted operating margin was 23.5%.
Supply Chain and Freight revenues augmented 8.4% to $4,256 million, aided primarily by the upbeat performance of Forwarding and Logistics businesses. Operating profit (on an adjusted basis) soared 48.3% to $448 million in the September quarter.
Upbeat 2021 Outlook
UPS, currently carrying a Zacks Rank #3 (Hold), raised its 2021 outlook for certain key metrics. The company now anticipates consolidated operating margin to be approximately 13% (earlier guidance:12.7%) in the current year. Return on invested capital is now expected to be approximately 29% from 28% expected previously. Capital expenditures are now estimated to be $4.2 billion (earlier guidance: $4 billion) in 2021. The company expects an effective tax rate of 22.5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Let’s take a look at some of the other earnings releases from companies within the Zacks Transportation sector.
CSX Corporation CSX reported third-quarter 2021 earnings of 43 cents per share, surpassing the Zacks Consensus Estimate of 38 cents. Total revenues of $3,292 million outperformed the Zacks Consensus Estimate of $3030.9 million.
Southwest Airlines LUV incurred a loss (excluding 96 cents from non-recurring items) of 23 cents per share in the third quarter of 2021, narrower than the Zacks Consensus Estimate of a loss of 27 cents. Operating revenues of $4,679 million outperformed the Zacks Consensus Estimate of $4,581.5 million.
United Airlines UAL incurred a loss (excluding $2.46 from non-recurring items) of $1.02 per share in the third quarter of 2021, narrower than the Zacks Consensus Estimate of a loss of $1.65. Operating revenues of $7,750 million surpassed the Zacks Consensus Estimate of $7639.7 million.
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