United Parcel Service Inc (NYSE: UPS) shares are trading slightly higher after it reported first-quarter FY24 results.
Revenue declined 5.3% Y/Y to $21.7 billion, missing the consensus of $21.9 billion.
Adjusted EPS was $1.43, down from $2.20 in the prior-year quarter, beating the consensus of $1.30.
Consolidated operating profit was $1.6 billion, down 36.5% Y/Y and down 31.5% on an adjusted basis.
U.S. Domestic Segment revenue fell 5.0% Y/Y to $14.2 billion due to a 3.2% decrease in average daily volume. The adjusted operating margin stood at 5.9%.
International Segment revenue decreased by 6.3% Y/Y to $4.26 billion, owing to a 5.8% decrease in average daily volume. The adjusted operating margin was 16.0%.
Supply Chain Solutions Segment revenue decreased by 5.3% to $3.2 billion due to market rate declines in forwarding, and the adjusted operating margin was 7.0%.
UPS' operating cash flow for the quarter totaled $3.3 billion, and free cash flow was $2.3 billion.
2024 Outlook Reaffirmed: UPS expects revenue of $92 billion-$94.5 billion versus the $93.03 billion consensus and sees an adjusted operating margin of 10%-10.6%.
UPS expects 2024 capital expenditures of about $4.5 billion.
Last month, UPS said it expects FY26 consolidated revenue of $108 billion - $114 billion, adjusted operating margin above 13%, and free cash flow of $17 billion - $18 billion.
This month, UPS disclosed winning a significant air cargo contract from the United States Postal Service (USPS).
Investors can gain exposure to the stock via IShares Trust IShares U.S. Transportation ETF (NYSE: IYT) and Direxion Daily Transportation Bull 3X Shares (NASDAQ: TPOR).
Price Action: UPS shares are up 0.30% at $145.80 premarket on the last check Tuesday.