UPS revenue increased to $18 billion in the first-quarter

  • UPS announced first-quarter 2020 diluted earnings per share of $1.11 and adjusted diluted earnings per share of $1.15. 
  • The company’s results were adversely affected by the disruption to customers from the global coronavirus pandemic. 

UPS has been designated by governments around the world as a Critical Infrastructure Business and continues to operate in all major countries, while adhering to additional regulatory requirements. 

In the U.S., the company is also front and center in leading the pandemic logistics response for the Federal Emergency Management Agency (FEMA) and other federal and state government agencies. 

How UPS performed in the first three months of 2020

  • Consolidated revenue increased to $18 billion, driven by growth in business-to-consumer shipments and gains in healthcare.
  • Net income was $965 million; adjusted net income was $1 billion. 
  • Net income included material headwinds due to disruptions from the coronavirus pandemic, higher self-insurance accruals and other items.
  • Adjusted capital expenditures were $939 million to support network enhancements.
  • Dividends per share increased 5.2%, with dividends remaining a high priority for the company.

U.S. Domestic Segment

  • Revenue increased 9.3% and average daily volume was up 8.5%, with growth across all products.
  • Next Day Air average daily volume grew 20.5%, the fourth consecutive quarter of double-digit increases.
  • Revenue per piece decreased less than 1% due to changes in customer and product mix.
  • Commercial deliveries declined while residential deliveries were elevated.
  • Shipment growth in the quarter was driven by large customers.
  • On-time performance across all service levels was near a record high in a dynamic environment.

International Segment

  • International average daily volume was down 1.8% with declines in commercial deliveries.
  • China volume primarily rebounded in March as its economic recovery accelerated, offsetting declines in January and February. Healthcare, high-tech and e-commerce sectors were positive contributors.
  • International cost per piece was down 0.5%, primarily due to the impact of currency. Additionally, the significant change in mix was partially offset by network adjustments to align capacity to changing trade patterns.
  • Operating margin was 16.3%; adjusted operating margin remained strong at 16.5%.

At this time, UPS is unable to predict the extent of the business impact or the duration of the coronavirus pandemic, or reasonably estimate its operating performance in future quarters. 

As a result, the company is withdrawing its previously issued 2020 revenue and diluted earnings per share growth guidance.

The company expects 2020 capital expenditures will be reduced by approximately $1 billion from previous estimates and is suspending share buybacks for 2020, reducing its planned full-year repurchase target by approximately $783 million.