UPS, a dominant force in the global logistics realm, has just shared its financial performance for Q2 2023. The detailed report not only sheds light on the reported (GAAP) figures but also offers a look at the adjusted (Non-GAAP) numbers. Let’s dive into the specifics:
Three Months Ended June 30, 2023
Key segments like the U.S. Domestic Package reported GAAP revenues of $12.794 billion. Once we account for transformation and other adjustments, this figure morphs to a Non-GAAP revenue of $12.715 billion. Similar patterns emerged in the International Package and Supply Chain Solutions segments, which showcased Non-GAAP revenues of $3.513 billion and $2.908 billion, respectively.
Operating expenses were recorded at $19.275 billion. Following certain adjustments, this amount tapered slightly to $19.136 billion.
On the front of operating profits, we see a pronounced uplift post adjustments. For instance, the U.S. Domestic Package segment displayed an increase from $1.602 billion (GAAP) to $1.681 billion (Non-GAAP). Both the International Package and Supply Chain Solutions mirrored this uptrend, with Non-GAAP operating profits settling at $902 million and $336 million in sequence.
The quarter’s adjusted net income stood at $2.187 billion, a leap from the GAAP-reported $2.081 billion, reflecting in a basic and diluted earnings per share of $2.54—up from the $2.42 originally stated.
Six Months Ended June 30, 2023
Over the span of the first half of 2023, the U.S. Domestic Package segment disclosed GAAP revenues of $26.315 billion, which streamlined to $26.214 billion post adjustments. Both the International Package and Supply Chain Solutions segments echoed this trend.
Operating expenses for this period clocked in at $39.659 billion, narrowing down to $39.509 billion after adjustments. It’s worth highlighting that the six-month net income showcased an impressive $4.091 billion, a spike from the GAAP figure of $3.976 billion.
Year-on-Year Comparisons
When juxtaposing the financials from June 30, 2023, with those from 2022, the International Package’s average revenue per piece (Domestic) registered a 2.1% hike, settling at $7.77 after accounting for currency fluctuations. Conversely, the Total International Package observed a 4.9% decline, resting at $21.08.
In terms of revenue trajectories year-on-year, all segments marked a downturn. The U.S. Domestic Package recorded a 6.9% decline, International Package dipped by 12.3%, and Supply Chain Solutions retracted by 23.2%.
Cash Flow & Debt Analysis
For H1 2023, UPS’s operating activities yielded cash flows of $5.594 billion. After subtracting capital expenses and adding back the proceeds from disposals and other investing ventures, the Free Cash Flow culminated at $3.836 billion.
The EBITDA for the trailing twelve months as of June 30, 2023, touched $17.04 billion. With several add-ons and subtractions, the Adjusted EBITDA clocked in at $15.69 billion.
Conclusion
While certain segments of UPS exhibited downturns in the quarter and half-year analysis, the intricate reconciliation paints a more comprehensive picture by integrating diverse adjustments. As the company navigates its strategic trajectory, these financial insights become paramount for stakeholders and investors monitoring UPS’s journey.
Disclaimer: This is a broad overview and should not replace financial advice. Always liaise with a qualified financial advisor before making any investment moves.
