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UPS Releases 4Q 2024 Earnings and Provides 2025 Guidance

Staff Report From Georgia CEO

Friday, January 31st, 2025

UPS (NYSE:UPS) today announced fourth-quarter 2024 consolidated revenues of $25.3 billion, a 1.5% increase from the fourth quarter of 2023. Consolidated operating profit was $2.9 billion, up 18.1% compared to the fourth quarter of 2023, and up 11.2% on a non-GAAP adjusted basis. Diluted earnings per share were $2.01 for the quarter; non-GAAP adjusted diluted earnings per share were $2.75, 11.3% above the same period in 2023.

For the fourth quarter of 2024, GAAP results include a total charge of $639 million, or $0.74 per diluted share, comprised of a non-cash, after-tax mark-to-market (MTM) pension charge of $506 million, total after-tax transformation strategy costs of $73 million, after-tax asset impairment charges of $46 million, and after-tax cost of $14 million related to the withdrawal from a multiemployer pension plan.

"I want to thank all UPSers for their hard work and efforts as we closed out 2024 with an outstanding peak, delivering best-in-class service and strong financial results ahead of our targets for the quarter," said Carol Tomé, UPS chief executive officer.

U.S. Domestic Segment†

 

 

4Q 2024

Non-GAAP

Adjusted

4Q 2024

 

4Q 2023

Non-GAAP

Adjusted

4Q 2023

Revenue

$17,312 M

 

$16,939 M

 

Operating profit

$1,681 M

$1,754 M

$1,448 M

$1,580 M

  • Revenue increased 2.2%, driven by a 2.4% increase in revenue per piece and increases in air cargo.

  • Operating margin was 9.7%; non-GAAP adjusted operating margin was 10.1%.

International Segment

 

 

4Q 2024

Non-GAAP

Adjusted

4Q 2024

 

4Q 2023

Non-GAAP

Adjusted

4Q 2023

Revenue

$4,923 M

 

$4,606 M

 

Operating profit

$1,019 M

$1,062 M

$890 M

$899 M

  • Revenue increased 6.9%, driven by an 8.8% increase in average daily volume.

  • Operating margin was 20.7%; non-GAAP adjusted operating margin was 21.6%.

Supply Chain Solutions1 †

 

 

4Q 2024

Non-GAAP

Adjusted

4Q 2024

 

4Q 2023

Non-GAAP

Adjusted

4Q 2023

Revenue

$3,066 M

 

$3,372 M

 

Operating profit

$226 M

$284 M

$139 M

$308 M

¹ Consists of operating segments that do not meet the criteria of a reportable segment under ASC Topic 280 – Segment Reporting.

  • Revenue declined 9.1%, due to a reduction in revenue following the divestiture of Coyote, partially offset by growth in air and ocean forwarding.

  • Operating margin was 7.4%; non-GAAP adjusted operating margin was 9.3%.

Full-Year 2024 Consolidated Results

  • Revenue was $91.1 billion.

  • Operating profit of $8.5 billion; non-GAAP adjusted operating profit of $8.9 billion.

  • Operating margin was 9.3%; non-GAAP adjusted operating margin was 9.8%.

  • Diluted EPS totaled $6.75; non-GAAP adjusted diluted EPS of $7.72.

  • Cash from operations was $10.1 billion and non-GAAP adjusted free cash flow was $6.3 billion.

In addition, the company returned $5.9 billion of cash to shareowners through dividends and share repurchases.

2025 Outlook

The company provides certain guidance on a non-GAAP adjusted basis because it is not possible to predict or provide a reconciliation reflecting the impact of various potential future events, including the impact of pension adjustments, certain strategic initiatives or other unanticipated events, which would be included in reported (GAAP) results and could be material.

Today the company announces the following set of strategic actions: first, it has reached an agreement in principle with its largest customer to lower its volume by more than 50% by the second half of 2026; second, effective January 1, 2025, the company has insourced 100% of its UPS SurePost product; and third, in connection with these efforts, the company is reconfiguring its U.S. network, and launching multi-year "efficiency reimagined" initiatives to drive approximately $1.0 billion in savings through an end-to-end process redesign.

"We are making business and operational changes that, along with the foundational changes we’ve already made, will put us further down the path to becoming a more profitable, agile and differentiated UPS that is growing in the best parts of the market," said Tomé.

For the full year 2025, on a consolidated basis, UPS expects revenue to be approximately $89.0 billion and operating margin to be approximately 10.8%.

The company is planning capital expenditures of about $3.5 billion, dividend payments of around $5.5 billion, subject to board approval, and share repurchases of around $1.0 billion. The effective tax rate is expected to be around 23.5%.

* "Non-GAAP Adjusted" or "Non-GAAP Adj." amounts are non-GAAP adjusted financial measures. See the appendix to this release for a discussion of non-GAAP adjusted financial measures, including a reconciliation to the most closely correlated GAAP measure.

† Certain prior year amounts have been reclassified to conform to the current year presentation, including the recast of air cargo volume to U.S. Domestic, with no change to consolidated results. Certain amounts are calculated based on unrounded numbers.

Conference Call Information

UPS CEO Carol Tomé and CFO Brian Dykes will discuss fourth-quarter results with investors and analysts during a conference call at 8:30 a.m. ET, January 30, 2025. That call will be open to others through a live Webcast. To access the call, go to www.investors.ups.com and click on "Earnings Conference Call." Additional financial information is included in the detailed financial schedules being posted on www.investors.ups.com under "Quarterly Earnings and Financials" and as furnished to the SEC as an exhibit to our Current Report on Form 8-K.