UPS Inc. posted on Tuesday strong third-quarter results and raised its full-year operating margin outlook, sending its shares up sharply in premarket trading.
Earnings per share, on an adjusted and diluted basis, hit $2.71, up nearly 19% compared to the prior-year quarter, the Atlanta-based company (NYSE: UPS) reported. Analysts’ consensus on Barchart was $2.52 a share. Adjusted operating profit of $2.97 billion was up 23.4% year-over-year. Revenue of $23.2 billion increased 9.2% from the prior-year period. Cash from operations rose 26.7% year-over-year, while free cash flow jumped 52.3%, UPS said.
UPS said it raised its 2021 adjusted operating margin target to 13% from prior guidance of 12%. The announcement put a big tailwind in the stock in early-morning trading. As of 7:30 a.m., shares were up $9.23, a 4.5% gain.
The company’s domestic U.S. segment, which accounts for roughly half of total revenue, posted adjusted operating profit of $1.41 billion, up 7.4% from the 2020 quarter. Revenue rose to $14.2 billion from $13.2 billion, led by a 12% gain in revenue for each package shipped. Adjusted operating margin was flat year-over-year at $9.9%.
The international segment again was a star performer, with revenue of 15.5% and adjusted operating profit of $1.1 billion, up from $972 million. Adjusted margin came in at 22.3%. UPS said the segment experienced strong growth across all its regions.
The supply chain and solutions segment, which includes all nonpackage business, posted an 8.4% revenue increase, led by the freight forwarding and logistics businesses, which grew a combined 35.4% year-over-year. Adjusted operating profit soared to $448 million from $302 million. Adjusted margins came in at 10.5%.
Patrick Smith
You should probably remove that headline picture that has a UPS Freight tractor in it, as they are no longer part of the UPS picture.