UPS Q3 operating profit down 57%

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UPS reported a 13 percent decline in consolidated revenues at $21.1 billion for the third quarter of 2023. Consolidated operating profit was $1.3 billion, down 57 percent compared to the third quarter of 2022, and down 49 percent on an adjusted basis.

U.S. domestic segment revenue declined 11 percent to $13.7 billion, driven by a 11.5% decline in average daily volume, which was partially offset by a two percent increase in revenue per piece.

Adjusted operating profit was $665 million, down 60 percent from $1.7 billion in Q32022.

International revenue was down 11 percent at $4.3 billion "primarily driven by a 6.6 percent decrease in average daily volume and continued softness on Asia and Europe trade lanes."

Adjusted operating profit came in at $675 million compared to $1 billion in Q32022.

Supply Chain Solutions revenue was down 21 percent to $3 billion "due primarily to market rate and volume declines in forwarding, partially offset by growth in healthcare."

Carol Tomé, Chief Executive Officer, UPS says:“While unfavourable macro-economic conditions negatively impacted global demand in the quarter, our U.S. labour contract was fully ratified in early September and volume that diverted during our labour negotiations is starting to return to our network. I want to thank all UPSers for their hard work and efforts during this challenging time and for once again providing industry-leading service to our customers. Looking ahead, we are well-prepared for the peak holiday season.”

UPS updated its full-year 2023 consolidated revenue to be between $91.3-92.3 billion and a consolidated adjusted operating margin of between 10.8-11.3 percent.

UPS is maintaining its full-year planned capital expenditures target of about $5.3 billion, dividend payment expectations of around $5.4 billion, and 2023 share repurchases to be approximately $2.25 billion.

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