UPS (UPS) Q2 2024 earnings summary

Executive summary

• Q2 2024 consolidated revenue was $21.8B, down 1.1% year-over-year, with net income at $1.4B, down 32.3% from Q2 2023.

• Operating profit declined 30.1% to $1.94B; adjusted diluted EPS was $1.79, down 29.5% year-over-year.

• U.S. volume growth returned for the first time in nine quarters, marking a significant turning point.

• Announced acquisition of Estafeta in Mexico to strengthen North American logistics and nearshoring strategy, expected to close by year-end.

• Announced divestiture of Coyote truckload brokerage for $1.025B, expected to close in H2 2024.

Financial highlights

• Q2 consolidated operating margin was 8.9% (adjusted 9.5%); GAAP results included a $120M after-tax charge for a regulatory settlement and transformation costs.

• Six-month revenue was $43.5B, down 3.2% year-over-year; net income was $2.5B, down 36.6%.

• Free cash flow for the first half was $3.4B; dividends paid totaled $2.7B ($1.63/share).

• Capital expenditures were $2.0B in H1 2024; cash and equivalents at quarter-end were $6.3B.

Outlook and guidance

• Full-year 2024 consolidated revenue expected at approximately $93.0B; adjusted operating margin at 9.4%.

• Capital expenditures projected at $4.0B; free cash flow forecasted at $5.8B; dividends of $5.4B; share repurchases of $500M in 2024.

• U.S. operating margin expected to exit 2024 at 10%, with a long-term target of 12%.

• U.S. Domestic 2H24: revenue growth ~5%, average daily volume up mid-single digits, 3Q operating profit up double digits.