UPS Releases 3Q 2019 Earnings789

ATLANTA, GEORGIA

Operating Profit Up More Than 20%, with Margin Expansion in All Segments

• 3Q19 EPS of $2.01, Up More Than 16%; Adjusted* EPS Up 13.7% to $2.07
• U.S. Daily Volume Grew Above 9%; Next Day Air Volume Jumped Nearly 24%
• U.S. Operating Profit Rose Over 28%; Grew Nearly 26% on an Adjusted Basis
• Positive Operating Leverage in U.S. Driven by Lower Unit Cost
• International Operating Profit Up 24.4%; and 20.3% on an Adjusted Basis
• Supply Chain and Freight Operating Margin of 7.3%; Adjusted Margin of 7.6%
• Reaffirms 2019 Adjusted EPS and Raises Adjusted FCF Target to Over $4.0B

UPS (NYSE:UPS) today announced third-quarter 2019 adjusted earnings per share of $2.07, a 13.7% increase over the same period last year. The company delivered strong operating profit growth of more than 20%, led by the U.S. Domestic and International segments. U.S. Domestic performed exceptionally well year-over-year, with volume gains across all products.

“Our results reflect significant progress from our transformation initiatives, and our ability to generate growth and deliver increased efficiencies in a dynamic economic environment,” said David Abney, UPS chairman and CEO. “As we recently announced, we continue to forge new partnerships and create innovative solutions to accelerate growth in the most attractive opportunities.”

Transformation strategy costs are excluded from adjusted results. Adjusted third-quarter 2019  results exclude a pre-tax transformation charge of $63 million, or $0.06 per diluted share after tax.  Adjusted third-quarter 2018 results excluded a pre-tax transformation charge of $97 million, or $0.09 per share after tax.  

* “Adjusted” and amounts presented in this release are non-GAAP financial measures. See the appendix to this release for a discussion of non-GAAP financial metrics, including a reconciliation to the most closely correlated GAAP measure.

For the total company in 3Q 2019:

• Consolidated revenue increased 5% to $18.3 billion, driven by strong average daily volume growth in the U.S.    
• Total operating profit growth was very strong at more than 23%, and 20.1% on an adjusted basis, led by the U.S. Domestic and International segments.
• Total operating margin expanded 170 basis points**; adjusted operating margin expanded 150 basis points.
• Adjusted capital expenditures for the year are approximately $4.5 billion to support network enhancements.
• Year-to-date cash from operations was $5.7 billion and adjusted free cash flow grew to $3.2 billion.
• Dividends per share increased 5.5%, and the company repurchased 7 million shares for approximately $753 million year-to-date.

Tuzemský segment v USA

In the U.S. Domestic segment, total volume across all products grew more than 9%.  Next Day Air increased nearly 24%; Deferred Air grew more than 17%; and Ground volume rose nearly 7%.  Growth came from both B2C and B2B shippers, led by the retail, healthcare and high-tech sectors.

“The investments we are making in new facilities and automation in our network, coupled with solid execution of our strategies, are producing strong results, including strong, positive operating leverage,” said Abney.  “We see significant near-term benefits to both top- and bottom-line results in the U.S. and continued momentum into the future.”

• Revenue grew more than $1 billion, a nearly 10% increase.
• Operating profit increased 28.1%, and nearly 26% on an adjusted basis.
• Operating margin was 10.6%; adjusted operating margin expanded 130 basis points.
• Unit costs were lower by 2.7%; on an adjusted basis, down 2.5%, contributing to positive operating leverage.  

Mezinárodní segment

The International segment reported strong operating profit and expanded operating margin. The company’s performance is the result of a number of items in the quarter, including strong cost control, good execution and targeted domestic and export growth.

• International saw export volume growth on intra-European trade lanes and virtually all Asia trade lanes except Asia-U.S.
• International domestic revenue per piece fell less than 1%, but grew 2.3% when adjusting for currency.
• Operating profit increased more than 24%, or by 20.3% on an adjusted basis.
• Industry-leading operating margin remained strong at 19.1%; adjusted operating margin expanded 320 basis points**.

• **One basis point equals one-hundredth of a percentage point.

Segment dodavatelského řetězce a nákladní dopravy

The Supply Chain and Freight segment’s performance was driven by small and medium-sized customers that generate higher-quality revenue, as well as cost management actions throughout the network.

• Operating margin expanded to 7.3%, and to 7.6% on an adjusted basis.
• Logistics revenue increased more than 7% from growth in the healthcare, retail and manufacturing sectors.
• UPS Freight produced an increase in revenue per LTL (less-than-truckload) hundredweight of nearly 4%, driven by its focus on small and medium-sized businesses.
• The Forwarding unit adjusted costs and partially offset the negative revenue impact of trade uncertainty.

Výhled

Společnost poskytuje odhad na upravené bázi (bez přihlédnutí k účetním principům GAAP), protože nelze předvídat ani provádět srovnání na základě dopadu budoucích úprav penzí oceňovaných podle tržní hodnoty nebo jiných neočekávaných událostí, které by byly zahrnuty ve vykázaných výsledcích (podle principů GAAP) a mohly by být podstatné.

“UPS delivered solid performance for the third quarter,” said Brian Newman, UPS’s chief financial officer. “Positive impacts from our transformation initiatives are visible in our results as we continue to improve network efficiencies and create new solutions that will open more growth opportunities well into the future.”

• The company reaffirms full-year adjusted diluted EPS in the range of $7.45 to $7.75.
• Guidance assumes no further deterioration regarding global trade uncertainty or U.S. industrial weakness.
• Adjusted free cash flow for the year is projected to be over $4.0 billion.
• Capital investments have been reduced in both 2019 and 2020 by about $500 million each year. Network automation targets and other transformation goals remain unchanged.
• The effective tax rate for the full year 2019 is estimated to be between 22% and 23%.
• Transformation charges are not included in the adjusted guidance.

**One basis point equals one-hundredth of a percentage point.

Informace o konferenčním hovoru

UPS CEO David Abney, CFO Brian Newman and former CFO Richard Peretz will discuss third-quarter results with investors and analysts during a conference call at 8:30 a.m. ET, 22. října 2019.  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 Webcast.” Další finanční údaje jsou obsaženy v podrobných finančních plánech zveřejněných na webu www.investors.ups.com v části „Finance“ a byly zaslány komisi SEC jako doklad k naší aktuální finanční zprávě na formuláři 8-K.

Informace o společnosti UPS

UPS je světovou jedničkou v oblasti logistiky. Nabízí širokou škálu řešení včetně přepravy balíků a nákladů, usnadňuje mezinárodní obchod a zavádí moderní technologie za účelem efektivnějšího řízení světa obchodu. Společnost UPS má hlavní sídlo v Atlantě a působí ve více než 220 zemích a oblastech po celém světě. Společnost UPS získala za své služby přepravy a doručování ocenění America's Best Customer Service Company (společnost s nejlepším zákaznickým servisem v Americe) magazínu Newsweek, ocenění Most Valuable Brand in Transportation (nejhodnotnější značka v oblasti přepravy) magazínu Forbes a nejvyšší hodnocení v seznamu společenské odpovědnosti JUST 100, v přehledu Dow Jones Sustainability World Index, Harris Poll Reputation Quotient a v dalších prestižních žebříčcích a oceněních. The company can be found on the web at ups.com or pressroom.ups.com and its corporate blog can be found at ups.com/longitudes The company’s sustainability eNewsletter, UPS Horizons, can be found at ups.com/sustainabilitynewsletter. Chcete-li dostávat novinky o společnosti UPS přímo, sledujte @UPS_News na Twitteru. Chcete-li odesílat zásilky se společností UPS, navštivte stránky ups.com/ship.

Výhledová prohlášení

Except for historical information contained herein, the statements made in this release constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements, including statements regarding the intent, belief or current expectations of UPS and its management regarding the company's strategic direction, prospects and future results, involve certain risks and uncertainties.

Certain factors may cause actual results to differ materially from those contemplated by the forward-looking statements, including changes in economic and other conditions in the markets in which we operate, governmental regulations (including tax laws and regulations), our competitive environment, the facts or assumptions underlying our health and pension benefit funding obligations, the results of negotiation and ratification of labor contracts, the impact of any strikes, work stoppages or slowdowns, changes in aviation and motor fuel prices, cyclical and seasonal fluctuations in our operating results, and other risks discussed in the company's Form 10-K and other filings with the Securities and Exchange Commission, which discussions are incorporated herein by reference.

Sesouhlasení finančních měřítek vycházejících a nevycházejících z účetních principů GAAP.

We supplement the reporting of our financial information determined under generally accepted accounting principles ("GAAP") with certain non-GAAP financial measures, including, as applicable, "as adjusted" operating profit, operating margin, other income (expense), pre-tax income, net income and earnings per share. Kromě toho pravidelně zveřejňujeme volný tok hotovosti, volný peněžní tok bez dobrovolných příspěvků na penzi a kapitálové výdaje včetně splátek jistiny závazků z kapitálového leasingu. Ekvivalentní měřítka stanovená v souladu s principy GAAP se rovněž označují jako „vykázané“ nebo „neupravené“ údaje.

We consider quantitative and qualitative factors in assessing whether to adjust for the impact of items that may be significant or that could affect an understanding of our ongoing financial and business performance or trends. Examples of items for which we may make adjustments include but are not limited to: amounts related to mark-to-market gains or losses (non-cash); settlement of contingencies; gains or losses associated with mergers, acquisitions, divestitures and other structural changes; charges related to restructuring programs such as the implementation of our Transformation strategy; asset impairments (non-cash); amounts related to changes in tax regulations or positions; amounts related to changes in foreign currency exchange rates and the impact of any hedging activities; other pension and postretirement related items; and debt modifications.

We believe that these non-GAAP measures provide additional meaningful information to assist users of our financial statements in understanding our financial results, cash flows and assessing our ongoing performance because they exclude items that may not be indicative of, or are unrelated to, our underlying operations and may provide a useful baseline for analyzing trends in our underlying businesses. Management uses these non-GAAP financial measures in making financial, operating and planning decisions. We also use certain of these measures for the determination of incentive compensation awards.

K finančním měřítkům nevycházejícím z principů GAAP by se mělo přihlížet v kombinaci s našimi vykazovanými výsledky připravenými v souladu s principy GAAP, nikoli místo nich. Naše finanční údaje nevycházející z principů GAAP nepředstavují komplexní základ účetnictví. Proto naše finanční údaje nevycházející z principů GAAP nemusí být srovnatelné s podobně nazvanými měřítky vykazovanými jinými společnostmi.

Náklady související s restrukturalizačními programy; náklady na transformační strategii

We supplement the presentation of our operating profit, operating margin, pre-tax income, net income and earnings per share with similar non-GAAP measures that exclude the impact of costs related to restructuring programs, including Transformation strategy costs.  We believe this adjusted information provides a useful comparison of year-to-year financial performance without considering the short-term impact of restructuring costs. Náš výkon hodnotíme na tomto upraveném základě.

Dopad na změny směnných kurzů cizích měn a zajišťovacích činností

We supplement the reporting of our revenue, revenue per piece and operating profit with non-GAAP measures that exclude the period-over-period impact of foreign currency exchange rate changes and hedging activities. Domníváme se, že informace o výnosu nezávislém na měně, výnosu na kus a provozním zisku umožňují uživatelům našich finančních výkazů porozumět trendům růstu našich produktů a výsledků. We evaluate the performance of our International Package and Supply Chain and Freight segments on this currency-neutral basis.

Výnosy nezávislé na měně, výnosy na kus a provozní zisk se vypočítají podělením nahlášených výnosů, výnosů na kus a provozního zisku v USD za aktuální období aktuálními průměrnými směnnými kurzy za období k odvození výnosů, výnosů na kus a provozních zisků za aktuální období v místní měně. Odvozené částky jsou následně vynásobeny průměrnými směnnými kurzy zahraničních měn používanými k převodu porovnatelných výsledků za každý měsíc předchozího roku (včetně dopadů zajišťovacích činností zahrnujících cizí měny mezi obdobími). Rozdíl mezi nahlášenými výnosy, výnosy na kus a provozním ziskem za aktuální období v USD a odvozenými výnosy, výnosy za kus a provozním ziskem za aktuální období v USD představuje vliv měnových fluktuací mezi obdobími.

Volný tok hotovosti a upravené kapitálové výdaje

We supplement the reporting of cash flows from operating activities with free cash flow, free cash flow excluding discretionary pension contributions and free cash flow plus principal repayments of capital lease obligations, non-GAAP liquidity measures. We believe these free cash flow measures are important indicators of how much cash is generated by regular business operations and we use them as a measure of incremental cash available to invest in our business, meet our debt obligations and return cash to shareowners. Additionally, we believe that adjusting capital expenditures for principal repayments of capital lease obligations more appropriately reflects the overall cash that we have invested in capital assets.We calculate free cash flow as cash flows from operating activities less capital expenditures, proceeds from disposals of property, plant and equipment, and plus or minus the net changes in finance receivables and other investing activities. Volný tok hotovosti bez dobrovolných penzijních příspěvků přidává zpět přináší dobrovolné penzijní příspěvky provedené během daného období.