UPS's fourth-quarter revenue was $27.03 billion, lower than market expectations!

It is learned that on January 31, the American express delivery company UPS announced its fourth-quarter financial results. Due to the decrease in package volume, the company's revenue this quarter was lower than Wall Street expectations and decreased compared with last year.

In the fourth quarter of 2022, UPS's total revenue was US$27.03 billion, a year-on-year decrease of 2.7%; net profit was US$3.453 billion, a year-on-year increase of 11.6%; and adjusted earnings per share was US$3.62, a year-on-year increase of 0.8%.

Specifically, in the fourth quarter, UPS's U.S. domestic business revenue increased 3%, driven by package rates. Due to reduced shipping volume and weak demand in China, international business revenue fell 8%.

In addition, UPS's supply chain business revenue fell 18% due to a decrease in the number of freight forwarding businesses, which was partially offset by growth in the healthcare business.

UPS also provided full-year guidance that fell short of Wall Street expectations. It expects revenue of between $97 billion and $99.4 billion in 2023, compared with analysts’ expectations of $99.98 billion. However, UPS expects the second half of the year to be better than the first half.

The company also forecast full-year adjusted operating margins of 12.8% to 13.6% and capital expenditures of about $5.3 billion, compared with $5 billion last year when it slashed spending.

UPS's stock price has fallen more than 10% in 2022. Consumers are more cautious about spending due to inflation. The company is monitoring adverse factors that may affect its revenue, including rising interest rates, high inflation and other macroeconomic factors.

"We expect 2023 to be a difficult year," UPS Chief Financial Officer Brian Newman said on an earnings call on Tuesday. Newman also noted that UPS expects about 56% of its profits to be realized in the second half of the year as challenges in both its domestic and international businesses are expected to ease in the latter months of the year.

It is reported that due to the crazy expansion during the epidemic, express delivery companies such as UPS are now burdened with the dilemma of excess warehousing capacity. With the reduction in freight volume and the increase in costs, they have turned to raising freight rates. At the end of 2022, UPS and its competitor FedEx raised freight rates by 6.9%. Last quarter, UPS also announced that it would cut capital expenditures by $500 million, including leasing rather than purchasing certain spaces.

Editor ✎ Nicole/

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