UPS Releases 4Q 2022 Earnings
• Consolidated Revenues of $27.0B, Down 2.7% from Last Year
• Consolidated Operating Margin of 11.8%; Adjusted Consolidated Operating Margin of 14.1%
• Diluted EPS of $3.96; Adjusted Diluted EPS Up 0.8% Over Last Year to $3.62
• Declares a Quarterly Dividend of $1.62, a Per Share Increase of 6.6%, and Authorizes a New $5B Share Repurchase Program, Replacing the Existing Authorization
January 31, 2023 – UPS (NYSE:UPS) today announced fourth-quarter 2022 consolidated revenues of $27.0 billion, a 2.7% decrease from the fourth quarter of 2021. Consolidated operating profit was $3.2 billion, down 17.9% compared to the fourth quarter of 2021, and down 3.3% on an adjusted basis. Diluted earnings per share were $3.96 for the quarter; adjusted diluted earnings per share of $3.62 were 0.8% above the same period in 2021.
For the fourth quarter of 2022, GAAP results include a net benefit of $299 million, or $.34 per diluted share, comprised of a non-cash, after-tax mark-to-market (MTM) pension gain of $782 million, a one-time, non-cash, after-tax charge of $384 million resulting from accelerated vesting of restricted performance units in connection with a change in incentive compensation program design, a non-cash, after-tax charge of $58 million due to a reduction in the residual value of the company’s MD-11 aircraft and after-tax transformation and other charges of $41 million.
“I want to thank all UPSers for delivering what matters throughout the holiday season, including industry-leading service to our customers for the fifth consecutive year,” said Carol Tomé, UPS chief executive officer. “For the year, we reached our targeted consolidated operating margin and return on invested capital goals one year earlier than originally anticipated. Our results in 2022 demonstrate our strategy is working.”
• Revenue grew 3.1%, driven by a 7.2% increase in revenue per piece.
• Operating margin was 10.1%; adjusted operating margin was 12.8%.
• Revenue decreased 8.3%, driven by an 8.6% reduction in average daily volume due to lower domestic volume and softness in China trade lanes.
• Operating margin was 20.6%; adjusted operating margin was 22.0%.
1 Consists of operating segments that do not meet the criteria of a reportable segment under ASC Topic 280 – Segment Reporting.
• Revenue decreased 18.1%, due to volume and market rate declines in air and ocean freight forwarding, partially offset by growth in our healthcare business.
• Operating margin was 8.7%; adjusted operating margin was 10.5%.
Full-Year 2022 Consolidated Results
• Revenue increased 3.1% to $100.3 billion.
• Operating profit of $13.1 billion; adjusted operating profit of $13.9 billion, up 5.4%.
• Operating margin was 13.0%; adjusted operating margin was 13.8%.
• Diluted EPS totaled $13.20; adjusted diluted EPS were $12.94.
• Adjusted return on invested capital was 31.3%.
• Cash from operations was $14.1 billion and free cash flow was $9.0 billion.
In addition, the Company returned $8.6 billion of cash to shareowners through dividends and share buybacks.
For the 14th consecutive year, the UPS Board of Directors has approved an increase to the company’s quarterly dividend. UPS will pay a first-quarter 2023 dividend of $1.62 per share on all outstanding Class A and Class B shares. The dividend is payable March 10, 2023 to shareowners of record on February 21, 2023. In addition, the UPS Board of Directors has approved a new $5 billion share repurchase authorization, replacing the company’s existing authorization.
The company provides certain guidance on an adjusted (non-GAAP) basis because it is not possible to predict or provide a reconciliation reflecting the impact of future pension adjustments or other unanticipated events, which would be included in reported (GAAP) results and could be material.
For the full year 2023, UPS expects revenue to be between $97.0 billion and $99.4 billion and consolidated adjusted operating margin of between 12.8% and 13.6%.
The company is planning 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. The effective tax rate is expected to be around 23.5%.
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