UPS Beats Q3 Estimates with First Revenue Beat in Two Years; Raises Margin Outlook as Shares Surge

Oct 24, 2024, 10:31 AM

United Parcel Service (UPS) reported its Q3 2024 earnings, exceeding analysts' expectations and marking its first revenue beat in two years. The company announced adjusted earnings per share (EPS) of $1.76, surpassing the estimated $1.65 and improving from $1.57 in the same period last year. Revenue increased by 5.6% year-over-year to $22.2 billion, slightly above the forecasted $22.16 billion. UPS's non-GAAP operating margin for the quarter stood at 8.9%, and the U.S. domestic margin was reported at 6.7%, beating the estimated 5.2%. The operating ratio was reported at 60.3%. Despite the positive quarterly results, UPS adjusted its full-year 2024 outlook. The company lowered its revenue guidance to approximately $91.1 billion from the prior estimate of $93 billion, citing adjustments in its business projections. However, UPS raised its non-GAAP adjusted operating margin expectation to 9.6%, up from the previous forecast of 9.4%. The company reaffirmed its commitment to capital expenditures of around $4 billion and expects dividend payments of approximately $5.4 billion, subject to board approval. UPS reported an overall volume increase of 7.1%, a significant jump from the previous 0.1% growth, indicating strength in domestic deliveries. Looking ahead, UPS expects its Q4 results to be consistent sequentially with Q3. Following the earnings announcement, UPS shares surged over 8% in pre-market trading, reflecting investor confidence in the company's performance despite the adjusted full-year revenue guidance.