- Focused on the Health and Safety of Employees and the Public
- Supported Customers with Near Record On-Time Service
- COVID-19 Weighed on First-Quarter Results
- Cash from Operations of $2.6B; Adjusted* Free Cash Flow of $1.6B
- UPS Liquidity and Financial Condition Remain Strong
UPS (NYSE:UPS) today 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. As a logistics leader, UPS is supporting FEMA and its Project Airbridge by managing charter flights around the globe. UPS has delivered several million pounds of Personal Protective Equipment for FEMA into dedicated UPS distribution space. In addition, as part of FEMA’s Project Airbridge and other healthcare-related missions, in April the company increased the number of flights by over 200 to transport critical life-saving cargo to the U.S. and Europe.
“I want to thank all 495,000 UPSers for their extraordinary efforts to leverage the full power of our global network in the fight against the coronavirus pandemic, keeping critical goods moving for businesses and consumers globally,” said David Abney, UPS chairman and CEO. “The world is counting on UPS more than ever before as we support the people on the front lines of this crisis and our customers with speed, ingenuity and reliability.”
In the first quarter of 2020, the company incurred a pre-tax transformation charge of $45 million, or $0.04 per share after tax. First-quarter 2019 adjusted results excluded a pre-tax charge of $123 million, or $0.11 per share after tax, from transformation-related charges.
Diluted Earnings Per Share
* “Adjusted” amounts presented in this release are non-GAAP financial measures. 請參閱本新聞稿附錄，查看非 GAAP 財務指標討論，包括最密切相關的 GAAP 指標對賬。
For the total company in 1Q 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
The progression of stay-at-home restrictions instituted across the country as a result of coronavirus closed businesses and disrupted supply chains, resulting in an unprecedented shift in customer and product mix in the quarter. The company’s automated hubs and other transformation investments generated efficiency gains; however, these benefits did not offset the significant headwinds from the impact the coronavirus pandemic had on UPS customers, coupled with higher self-insurance accruals. UPS continues to adapt its network to the current economic environment while supporting customers and critical government programs.
- 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.
UPS’s International segment generated $551 million in operating profit, or $558 million in operating profit on an adjusted basis, despite weakening global economic activity. The company executed well to contain costs and target customer opportunities as the coronavirus pandemic rapidly spread from Asia to other parts of the world.
- 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%.
Supply Chain and Freight generated operating profit of $157 million, or $158 million in operating profit on an adjusted basis, despite significant economic headwinds from the coronavirus pandemic. Revenue was negatively impacted by widespread reductions in global economic activity. The segment is taking numerous actions to assist customers and improve financial performance as demand recovers, including activating aircraft charters from Asia, expanding customer relationships in the healthcare sector and applying peak surcharges where appropriate.
- Revenue was down less than 1% due to disciplined focus on growth opportunities and the segment’s broad portfolio of solutions.
- Toward the end of the quarter, UPS Freight and Coyote experienced depressed volume levels primarily from mandated stay-at-home restrictions and businesses closures.
- Logistics grew both revenue and operating profit, led by double-digit growth from Marken.
- Within the Forwarding unit, International Air Freight tonnage rebounded in March generating revenue and profit growth in the quarter.
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. UPS has taken steps to ensure it remains strong and resilient throughout this period, including:
- The company expects 2020 capital expenditures will be reduced by approximately $1 billion from previous estimates.
- UPS is suspending share buybacks for 2020, reducing its planned full-year repurchase target by approximately $783 million.
“We will continue to adapt through this challenging period and prioritize investments and operational decisions that put UPS in the best financial position.” said Brian Newman, UPS’s chief financial officer. “We take a disciplined and balanced approach to capital allocation and are confident in our liquidity position including our commitments to capital management and dividends.”
UPS CEO David Abney and CFO Brian Newman will discuss first-quarter results with investors and analysts during a conference call at 8:30 a.m. ET, 2020 年 4 月 28 日. 此次電話會議將透過網上直播供其他人觀看。若要聽取電話會議，請前往 www.investors.ups.com 並點按「關於收益的網絡直播」。其他財務資訊包含在 www.investors.ups.com 上「財務」部分中 公佈的詳細財務明細表中，內容與我們作為 8-K 表上「當前報告」之附表而提交給 SEC 的內容一致。
UPS (NYSE: UPS) 於全球物流業具領導地位，提供包括包裹和貨物運輸在內的多元化解決方案，並積極促進國際貿易，善用先進技術提高商業管理的效率。總部位於亞特蘭大的 UPS 為全球超過 220 個國家和地區提供服務。UPS 因其託運與派送服務而獲得《新聞週刊》雜誌授予的美國最佳客戶服務獎；《福布斯》雜誌的最有價值運輸品牌；並因社會責任躋身公平 100 企業榜單、道瓊斯可持續發展全球指數，以及 Harris Poll「聲譽商數」排名，還有其他顯赫的排名與獎項。查閱詳細公司資料請瀏覽 ups.com 或 pressroom.ups.com ，閱讀公司博客請瀏覽 ups.com/longitudes ，查閱公司的可持續發展電子快訊 UPS Horizons 請瀏覽 ups.com/sustainabilitynewsletter。如要直接獲取 UPS 新聞，可於 Twitter 追蹤 @UPS_News。若要用 UPS 進行託運，請瀏覽ups.com/ship。
本新聞稿，我們截至 2019 年 12 月 31 日 年度 10-K 表上「年度報告」及我們提交給證券交易委員會的其他備案文件中包含並引用了《1995 年美國私人證券訴訟改革法案》意思範疇內的「預測性陳述」。除當前或歷史事實之外的聲明，及所有帶有「相信」、「預測」、「預期」、「估計」、「假定」、「打算」、「預料」、「目標」、「計劃」及其變體和類似術語，均為預測性陳述。根據《1933年證券法》第 27A 條和《1934 年證券交易法》第 21E 條規定，預測性陳述應遵守聯邦證券法的安全港規則。
預測性陳述存在某些風險與不確定性，這些風險和不確定性可能導致實際結果與我們的歷史經驗、當前預期或預期結果之間存在重大差異。這些風險與不確定性有很多都不在我們控制之下，包括但不限於：changes in general economic conditions, in the U.S. or internationally; significant competition on a local, regional, national and international basis; changes in our relationships with our significant customers; changes in the complex and stringent regulation in the U.S. and internationally (including tax laws and regulations); increased physical or data security requirements that may increase our costs of operations and reduce operating efficiencies; legal, regulatory or market responses to global climate change; results of negotiations and ratifications of labor contracts; strikes, work stoppages or slowdowns by our employees; the effects of changing prices of energy, including gasoline, diesel and jet fuel, and interruptions in supplies of these commodities; changes in exchange rates or interest rates; uncertainty from the expected discontinuance of LIBOR and transition to any other interest rate benchmark; our ability to maintain the image of our brand; breaches in data security; disruptions to the Internet or our technology infrastructure; interruptions in or impacts on our business from natural or man-made event or disasters including terrorist attacks, epidemics and pandemics; our ability to accurately forecast our future capital investment needs; exposure to changing economic, political and social developments in international and emerging markets; changes in business strategy, government regulations, or economic or market conditions that may result in substantial impairment of our assets; increases in our expenses or funding obligations relating to employee health, retiree health and/or pension benefits; potential additional tax liabilities in the U.S. or internationally; the potential for various claims and litigation related to labor and employment, personal injury, property damage, business practices, environmental liability and other matters; our ability to realize the anticipated benefits from acquisitions, joint ventures or strategic alliances; our ability to realize the anticipated benefits from our transformation initiatives; cyclical and seasonal fluctuations in our operating results; our ability to manage insurance and claims expenses; and other risks discussed in our filings with the Securities and Exchange Commission from time to time, including our Annual Report on Form 10-K for the year ended December 31, 2019 and subsequently filed reports. Such risks and uncertainties are currently amplified by and may continue to be amplified by the coronavirus pandemic and the impact it has had, and may continue to have on the global economy and our business, financial position and results of operations. You should consider the limitations on, and risks associated with, forward-looking statements and not unduly rely on the accuracy of information contained in such forward-looking statements. 除非法律有所要求，我們不承擔為了反映在這些聲明日期後之事件、情況、預期變化，或意料之外之事件而更新預測性陳述的任何義務。
GAAP 和非 GAAP 財務指標調節
We supplement the reporting of our financial information determined under generally accepted accounting principles ("GAAP") with certain non-GAAP financial measures, including "adjusted" operating profit, operating margin, other income (expense), income before income taxes, income tax expense, net income and earnings per share. We periodically disclose free cash flow, free cash flow excluding discretionary pension contributions, and capital expenditures including principal repayments of capital lease obligations. Additionally, we supplement the reporting of 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. 根據 GAAP 確定的對等指標也指代「已報告的」或「未調整的」指標。
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); recognition 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.
我們相信，這些非 GAAP 指標提供了更多有意義的資訊，以協助我們財務報表之用戶理解我們的財務業績和現金流量及評估我們的持續業績，因為它們排除了可能無法表明或與我們的基本營運無關之項目，並可能是分析我們基本業務趨勢的有用基線。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.
非 GAAP 財務指標應視為我們根據 GAAP 編制的報告結果的補充，而不是更替。我們的非 GAAP 財務資訊不代表全面的會計基礎。因此，我們的非 GAAP 財務資訊可能無法與其他公司所報告的類似提法的指標作比較。
非 GAAP 的營業利潤、營業毛利、稅前收入、淨收益及每股收益不包括與重組計劃相關之成本的影響，包括轉型策略成本。在不考慮重組成本短期影響的情況下，我們認為這能提供有用的逐年財務業績對比資料。我們會在調整後的基礎上評估我們的業績。
We believe currency-neutral revenue, revenue per piece and operating profit information allows users of our financial statements to understand growth trends in our products and results. We evaluate the performance of our International Package and Supply Chain and Freight segments on this currency-neutral basis.
非 GAAP 退休金貼現率中立營業利潤不包括退休金服務成本的貼現率變化之逐期影響。We believe this allows users of our financial statements to understand growth trends in our products and results excluding the period over period movement in discount rates. 自 2020 年 1 月 1 日 起，除我們當前細分市場的營業利潤措施外，我們開始評估我們使用退休金貼現率中立營業利潤之細分市場。
We believe free cash flow, free cash flow excluding discretionary pension contributions and free cash flow plus principal repayments of capital lease obligations 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. 自由現金流（不包括可自由支配的退休金繳款）加回在此期間作出的任何可自由支配的退休金繳款。