UPS (UPS) Q4 2024 earnings summary

Executive summary

• Q4 2024 consolidated revenue rose 1.5% year-over-year to $25.3B, with operating profit up 11.2% to $3.1B and adjusted EPS up 11.3% to $2.75.

• Full-year 2024 revenue was $91.1B, with operating profit at $8.9B and adjusted EPS of $7.72; non-GAAP adjusted operating profit declined 9.9%.

• Strategic actions included reducing largest customer volume by over 50% by mid-2026, insourcing SurePost, and launching Efficiency Reimagined for $1B in savings.

• Network optimization led to 49 operational closures in 2024 and increased automation.

• Industry-leading on-time service during peak season for the seventh consecutive year.

Financial highlights

• Q4 2024 operating margin was 12.3% (adjusted), with diluted EPS at $2.75.

• Cash from operations in 2024 totaled $10.1B; free cash flow was $6.3B.

• $5.9B returned to shareholders via dividends and buybacks in 2024.

• Non-cash after-tax charges in Q4 included $506M pension, $73M transformation, $46M asset impairment, and $14M pension plan withdrawal, totaling $639M.

• Non-GAAP adjusted debt to EBITDA ratio stood at 2.25x.

Outlook and guidance

• 2025 consolidated revenue expected at ~$89B, with operating margin at ~10.8%.

• U.S. domestic revenue to decline 2.3% year-over-year, with ADV down ~8.5% but revenue per piece up ~6%.

• International segment revenue to grow ~2.5% with an 18.6% margin; supply chain solutions revenue at ~$11B with 8.5% margin.

• Free cash flow for 2025 projected at $5.7B; CapEx at $3.5B; $5.5B in dividends and $1B in share buybacks planned.

• Effective tax rate for 2025 projected at 23.5%.