UPS operating profit down 21% YoY to $2.8 billion in second quarter

UPS announced second-quarter 2023 consolidated revenues of $22.1 billion, a 10.9% decrease from the second quarter of 2022. Consolidated operating profit was $2.8 billion, down 21.4% compared to the second quarter of 2022, and down 18.4% on an adjusted basis.

Diluted earnings per share were $2.42 for the quarter; adjusted diluted earnings per share of $2.54 were 22.8% below the same period in 2022.

For the second quarter of 2023, GAAP results included after-tax transformation and other charges of $106 million, or $0.12 per diluted share.

“We are pleased to have reached agreement with the Teamsters. I want to thank the more than 500,000 UPSers around the world for their hard work and efforts, and for once again providing industry-leading service. And a special thank you to our customers for trusting your business with UPS during our labour negotiations,” said Carol Tomé, UPS chief executive officer. “UPS is stronger than ever. Looking ahead, we will stay on strategy to capture growth in the most attractive parts of the market and make our global integrated network even more efficient.”

Tomé, during the August 8, 2023, earning call, noted that UPS has added seven platforms to (Delivered at Place) DAP and expects to generate $3B in DAP revenue in 2023. She also noted that expanded European healthcare footprint with first dedicated facility in Ireland and expects to generate $10B in healthcare revenue in 2023. About its expansion of MOVIN in India, she noted that it now covers 90 percent of the domestic B2B market opportunity.

2023 Outlook
UPS updated its full-year 2023 consolidated revenue and adjusted operating margin targets primarily to reflect the volume impact from labour negotiations and the costs associated with the tentative agreement reached with the International Brotherhood of Teamsters on July 25, 2023.

UPS now expects full-year 2023 consolidated revenue to be about $93 billion and an adjusted operating margin of around 11.8 percent.

“The company is reaffirming its capital allocation plans and expects capital expenditures to be about $5.3 billion, dividend payments to be around $5.4 billion, subject to board approval, and share repurchases to be around $3 billion,” reads the release.