UPS Q3 revenue is lower than expected! Reiterates full-year performance guidance!

It is learned that on October 25, the American express company UPS announced its financial results for the third quarter of 2022. The financial report shows that the company's revenue this quarter was US$24.16 billion, lower than the expected US$24.30 billion; earnings per share were US$2.99, but higher than the expected US$2.84. Overall, UPS's performance in the third quarter was "mixed."

By business, UPS's revenue from domestic and international parcel businesses increased compared with the same period last year, but the company's supply chain solutions revenue fell 6.3% year-on-year due to a decline in air and ocean freight forwarding businesses.

Freight forwarding is the company's high-volume pallet shipping business, which, unlike its small package service, moves large volumes of freight around the world, managing customs and border logistics. The service can use its own UPS vehicles and consolidate freight onto other vehicles and their routes.

UPS said that weak global consumer demand has led to a decrease in its freight volume, but the increase in delivery rates has offset this impact. Similar to its competitor FedEx, UPS plans to increase its shipping rates by 6.9% from December 27 due to inflation and increased transportation costs.

UPS also reiterated its full-year revenue guidance, expecting revenue of $102 billion and an adjusted operating margin of around 13.7% in 2022. Due to the current macroeconomic uncertainty, the company lowered its expected capital expenditure for the full year from $5.5 billion to $5 billion.

For the 2022 holiday season, UPS expects freight volumes to be lower than last year due to reduced cooperation with major customers such as Amazon. It is understood that last quarter, the company said it was reducing its cooperation with Amazon. But despite this, UPS still plans to hire at least 100,000 workers for this peak season.

UPS CEO Carol Tomé said this year's holiday shipping peak will arrive later in December than last year as consumers return to pre-pandemic purchasing habits.

Editor ✎ Nicole/

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