• United Parcel Service posted a 1.5% year-over-year increase in fourth-quarter revenue to $25.3 billion while operating profit surged 18.1% to $2.9 billion
• For the full year 2024, UPS reported $91.1 billion in revenue, an operating profit of $8.5 billion, and free cash flow of $6.3 billion
• This year, UPS expects revenue to hit $89 billion, below market expectations of around $94.6 billion
United Parcel Service (UPS) posted a 1.5% year-on-year increase in fourth-quarter revenue to $25.3 billion while operating profit surged 18.1% to $2.9 billion, reflecting cost efficiencies and revenue growth in key segments, the company said in a release.
UPS closed 2024 with $91.1 billion in revenue, alongside $8.5 billion in operating profit and $6.3 billion in free cash flow. The company returned $5.9 billion to shareholders through dividends and stock repurchases.
For 2025, UPS projects revenue of around $89 billion and an operating margin of 10.8%. The revenue is below market expectations of around $94.6 billion. There are worries on the effect of a key initiative this year–dropping Amazon business. As part of a revised agreement, volume from UPS’s largest customer Amazon will be reduced by over 50% by 2026.
In addition, there seems to be softened demand for parcel shipping, as pandemic-era peaks fell back, leading clients to downgrade to economy services from premium.
UPS is also retrenching its business, aiming to cut costs through operational enhancements such as closing facilities across the U.S. and embarking on its “Efficiency Reimagined” initiative aimed at saving $1 billion through an end-to-end process redesign.
For this year, there is also a planned $3.5 billion in capital expenditures, $5.5 billion in dividends, and $1 billion in share buybacks.
“We are making business and operational changes that, along with the foundational changes we’ve already made, will put us further down the path to becoming a more profitable, agile and differentiated UPS that is growing in the best parts of the market,” said Carol Tomé, UPS chief executive officer.
Fourth quarter
For the fourth quarter alone, diluted earnings per share (EPS) stood at $2.01, while non-GAAP adjusted EPS rose 11.3% to $2.75. The results included a $639 million charge, covering a non-cash mark-to-market pension adjustment, asset impairments, and transformation strategy costs.
US domestic segment revenue increased 2.2%, driven by a 2.4% increase in revenue per piece and increases in air cargo. Operating margin was 9.7%; non-GAAP adjusted operating margin was 10.1%.
International segment revenue increased 6.9%, driven by an 8.8% increase in average daily volume. Operating margin was 20.7%; non-GAAP adjusted operating margin was 21.6%.
Supply chain solutions revenue declined 9.1%, due to a reduction in revenue following the divestiture of Coyote, partially offset by growth in air and ocean forwarding. Operating margin was 7.4%; non-GAAP adjusted operating margin was 9.3%.
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