UPS Clocks 3% Revenue Decline In Q4 On Softer Segment Performance; Approves $5B Buyback, Boosts Dividend

  • United Parcel Service Inc (NYSE: UPS) reported Q4 FY22 sales of $27.03 billion, -2.7% Y/Y, missing the consensus of $28.09 billion.

  • Adjusted EPS of $3.62 beat the consensus of $3.59.

  • Consolidated operating profit was $3.2 billion, down 17.9% Y/Y.

  • U.S. Domestic Segment revenue increased by 3.1% Y/Y to $18.25 billion, driven by a 7.2% increase in revenue per piece. The adjusted operating margin was 12.8%.

  • International Segment revenue decreased by 8.3% Y/Y to $4.95 billion, driven by an 8.6% decline in average daily volume due to lower domestic volume and softness in China trade lanes. The adjusted operating margin was 22%.

  • Supply Chain Solutions Segment revenue decreased by 18.1% to $3.83 billion due to air and ocean freight forwarding declines, and the adjusted operating margin reached 10.5%.

  • FY23 Outlook: UPS sees revenue of $97.0 billion - $99.4 billion (consensus $100.03 billion), adjusted operating margin of 12.8% - 13.6%, capital expenditures of $5.3 billion, dividend payments of $5.4 billion, and share repurchases of $3 billion.

  • Dividend & Buyback: UPS will pay a Q1 dividend of $1.62 per share (prior dividend of $1.52).

  • The board approved a new $5 billion share repurchase authorization, replacing the existing one.

  • Price Action: UPS shares are up 1.99% at $180.50 during the premarket session on Tuesday.

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