UPS 2Q18 Revenue Up 9.6% On Strong Growth and Pricing
- Reports 2Q18 EPS of $1.71, up 8.2%; Adjusted 2Q18 EPS of $1.94, up 23%
- International Operating Profit up 8.4%; Adj. Operating Profit Climbed 15%
- Average Daily Exports Increased 9.5%, Led by Europe
- Supply Chain & Freight Operating Profit up 1.9%; Adjusted Operating Profit Rose 17%
- U.S. Domestic Revenue Increased 6.3% on Higher Base Pricing
- YTD Cash from Operations was $7.2B and Free Cash Flow Surged to $4.4B
- Reaffirms 2018 Adjusted EPS and Raises Free Cash Flow Guidance to $5B
Consolidated Results | 2Q 2018 | Adjusted 2Q 2018 |
2Q 2017 |
Revenue | $17,456 M | $15,927 M | |
Net Income | $1,485 M | $1,685 M | $1,384 M |
Diluted earnings per share | $1.71 | $1.94 | $1.58 |
EPS Growth | 8.2% | 23% |
- Consolidated revenue increased 9.6% to $17.5 billion, on growth across all segments.
- Average yield increased 4.6%, led by International and U.S. Deferred Air products.
- Net income increased 7.3% and adjusted net income was 22% higher than 2Q17.
- Year-to-date cash from operations was $7.2 billion.
- Free Cash Flow surged to $4.4 billion in the first half of the year, driven primarily by transformation initiatives that improved working capital.
- Year-to-date dividends per share increased by 10% to $1.6 billion and share repurchases were $511 million.
- The company has made capital expenditures of $2.8 billion in the first half of 2018.
2Q 2018 | Adjusted 2Q 2018 | 2Q 2017 | |
Revenue | $10,354 M | $9,741 M | |
Operating profit | $939 M | $1,135 M | $1,255 M |
- Revenue improved across all products, demonstrating robust market demand for UPS solutions.
- Revenue per piece increased 3.6% as higher base-rates and fuel surcharges offset headwinds from customer and product mix.
- Adjusted operating profit excludes transformation charges of $196 million, which lowered reported operating margin by 190 basis points.
2Q 2018 |
Adjusted 2Q 2018
|
2Q 2017 | |
Revenue | $3,602 M | $3,171 M | |
Operating profit | $618 M | $654 M | $570 M |
- International revenue increased 14%, driven by double-digit growth in Export and Domestic.
- Daily Export shipments increased 9.5%, led by strong growth in Europe and the U.S.
- Operating profit was $618 million and adjusted operating profit rose 15% to $654 million.
- Adjusted operating profit excludes transformation charges of $36 million.
2Q 2018 |
Adjusted
2Q 2018
|
2Q 2017 | |
Revenue | $3,500 M | $3,015 M | |
Operating profit | $216 M | $247 M | $212 M |
- Revenue increased 16% to $3.5 billion, the business units are focused on leveraging UPS solutions to better serve middle-market customers.
- The Forwarding business led all units with 23% revenue growth, as revenue management initiatives drove top-line improvement.
- UPS Freight revenue increased 13% on higher pricing and tonnage gains.
- Operating profit was $216 million and adjusted operating profit was up 17% to $247 million.
- Adjusted operating profit excludes transformation charges of $31 million.
- UPS expects 2018 adjusted diluted earnings per share in a range of $7.03 to $7.37.
- The company raises 2018 free cash flow target to $5.0 billion.
- The effective tax rate should be in a range of 23% to 24% for the remainder of the year.
- Capital expenditures in 2018 are planned between $6.5 billion and $7.0 billion.
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