Larger Customer Volumpressey Raises Jitters, Storage tanks

United Parcel Service Inc (NYSE: UPS) Shares are shopping lower after the company reported Mixed results in the fourth quarter.

UPS reported consolidated revenue growth of 1.5% year over year to $ 25,301 billion, lacked $ 25,419 billion consensus. Adjusted EPS was $ 2.75, an increase of 11.3% yoy, Over consensus of $ 2.53.

GAAP results include a $ 639 million fee ($ 0.74 per share) covering a $ 506 million pension tax, $ 73 million in transformation costs, $ 46 million in asset reductions and $ 14 million for pension assembly.

Consolidated operating profit reached $ 2.9 billion, which rose 18.1% from the last year quarter and 11.2% on a non-GAAP adjusted basis. Adjusted operating margins stood at 12.3%, up from 11.2% a year ago.

The US domestic segment income rose 2.2% to $ 17,312 billion, reflecting a 2.4% increase in revenue per year. Piece and climbs in air cargo. The adjusted operating margin was 10.1%.

International segment revenue rose 6.9% to $ 4.923 billion, reflecting an increase of 8.8% in the average daily volume. The adjusted operating margin was 21.6%.

Segment revenue for the supply chain fell by 9.1% to $ 3,066 billion, driven by the division of coyote, partially offset by growth in air and sea shipping. The adjusted operating margin was 9.3%.

Oops’ operational cash flow for the 2024 financial year amounted to $ 10.1 billion, and the free cash flow was $ 6.3 billion. The company returned $ 5.9 billion to shareholders through dividends and repurchases of shares.

“We are making business and operational changes that, along with the fundamental changes we have already made, will set us further down the road to becoming a more profitable, supple and differentiated UPS that are growing in the best parts of the market,” commented Carol ToméOops -Managing Director.

Strategic actions: The company announced to reach an agreement to reduce volume with its largest customer by over 50% by the end of 2026, insourcing 100% of UPS Surepost from January 1, 2025 and configuring its US network again. In addition, UPS is launching multi-year “efficiency reinstated” initiatives aimed at saving $ 1 billion through an end-to-go-process-redesign.

2025 Outlook: Oops expect a turnover of ~ 89 billion dollars, sharply below $ 94,877 billion consensusand sees an adjusted operating margin of 10.8%.

The company is planning $ 3.5 billion in capital costs, $ 5.5 billion in dividends (pending approval), $ 1 billion in shares repurchases and an expected tax rate of 23.5%.

Price Action: UPS shares trading lower by 13.5% to $ 115.66 Premarket at the last check on Thursday.

Photo via Shutterstock.

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