UPS Releases 4Q 2020 Earnings

ROBO MOD

I'm a Robot
Staff member
  • Consolidated Revenue Increased 21.0% to $24.9B; Growth Across All Segments
  • Consolidated Operating Profit Up 1.6% to $2.2B, Up 26.0% on an Adjusted* Basis
  • Diluted EPS of ($3.75); Adjusted Diluted EPS of $2.66, Up 26.1%
  • For the Year, Reported Highest Revenue and Adjusted Diluted Earnings Per Share in Company History
UPS (NYSE:UPS) today announced fourth-quarter 2020 consolidated revenue of $24.9 billion, a 21.0% increase over the fourth quarter of 2019. Consolidated average daily volume increased 10.6% year over year. Operating profit was $2.2 billion, up 1.6% compared to last year’s fourth quarter, or 26.0% on an adjusted basis. Net loss was $3.3 billion for the quarter; adjusted net income was $2.3 billion or 26.4% above the same period last year.

In the fourth quarter, diluted loss per share was $3.75, compared to a diluted loss per share of $0.12 in the fourth quarter of 2019. Adjusted diluted earnings per share (EPS) increased 26.1% to $2.66, compared to $2.11 from the same period last year.

For the fourth-quarter of 2020, GAAP results include a total charge of $5.6 billion, or $6.38 per diluted share, comprised of a non-cash, after-tax mark-to-market (MTM) pension charge of $4.9 billion, an after-tax transformation charge of $114 million and an after-tax impairment charge of $545 million associated with the Company’s decision to sell UPS Freight. The Company’s fourth-quarter 2019 GAAP results included a total charge of $1.9 billion, or $2.23 per diluted share, comprised of a non-cash, after-tax MTM pension charge of $1.8 billion, an after-tax transformation charge of $39 million and a U.S. Domestic after-tax legal reserve charge of $91 million.

“Our financial performance in the fourth quarter exceeded our expectations, and I thank all UPSers for their extraordinary efforts to deliver industry-leading service through the holidays.” said Carol Tomé, UPS chief executive officer. “I’d also like to thank our customers who worked with us during this challenging year. As we look past 2020 into the new year, we are optimistic. During the fourth quarter, we began transporting COVID-19 vaccines and we stand ready to deliver hope and health to people around the world.”

U.S. Domestic Segment


4Q 2020
Adjusted
4Q 2020

4Q 2019
Adjusted
4Q 2019
Revenue$15,744 M $13,408 M
Operating profit$1,247 M$1,379 M$1,074 M$1,207 M

  • Revenue increased 17.4%, led by growth from small and medium-sized businesses.
  • Revenue per piece increased 7.8%, driven by Ground residential.
  • Operating margin was 7.9%; adjusted operating margin was 8.8%.

International Segment


4Q 2020
Adjusted
4Q 2020

4Q 2019
Adjusted
4Q 2019
Revenue$4,770 M $3,762 M
Operating profit$1,148 M$1,160 M$799 M$809 M
  • Average daily volume grew 21.9%, with export growth from all regions.
  • Revenue increased 26.8%, led by Asia and Europe.
  • Operating margin was 24.1%; adjusted operating margin was 24.3%.
Supply Chain and Freight Segment


4Q 2020
Adjusted
4Q 2020

4Q 2019
Adjusted
4Q 2019
Revenue$4,382 M $3,398 M
Operating profit/(loss)-$228 M$331 M$260 M$262 M
  • Revenue increased 29.0%, with strong market demand in nearly all businesses including freight forwarding out of Asia and UPS Healthcare.
  • Operating margin was -5.2%; adjusted operating margin was 7.6%.
Full-Year 2020 Consolidated Results
  • Revenue increased 14.2% to $84.6 billion.
  • Operating profit was $7.8 billion; adjusted operating profit was $8.7 billion, up 7.0%.
  • Diluted EPS totaled $1.64; adjusted diluted EPS was $8.23.
  • Capital expenditures were $5.4 billion, or on an adjusted basis $5.6 billion.
  • Annual free cash flow was $5.1 billion, including $3.1 billion in pension contributions.
  • Dividends paid were $3.6 billion, a per-share increase of 5.2% over the prior year.
* “Adjusted” amounts are non-GAAP financial measures. See the appendix to this release for a discussion of non-GAAP financial measures, including a reconciliation to the most closely correlated GAAP measure.

Outlook

Given continued economic uncertainty due to the global pandemic, the Company is not providing revenue or diluted earnings per share guidance. It is providing full-year guidance for capital allocation.

Full-Year 2021 Capital Allocation
  • Capital expenditures are planned to be about $4.0 billion.
  • Dividends are expected to grow, subject to Board approval.
  • Long-term debt maturities of $2.5 billion will be repaid when they come due.
  • Effective tax rate is expected to be approximately 23.5%.
  • The Company has no plans to repurchase shares or access the debt capital markets in 2021.
 

Up In Smoke

Well-Known Member
Charges for pensions, sale of Overnight and MTM pre tax left UPS with a net loss of 3 billion dollars for the 4th quarter. Domestic profits sunk again while International rose 3%. Supply chain tanked but the good news is the company is now rid of most of it's burdensome financial commitments. Would have been nice to hear about guidance, Cap x and share buy backs, but no company is currently doing that. The stock should see good times ahead even as we lose market share to Amazon and others.
 

Casca

Well-Known Member
If domestic continues this trend either correct it to sell it like freight.......no reason for any part of any company to drag the whole company down .....curious as to what the dividend increase will be.....10% ?.........
 
If domestic continues this trend either correct it to sell it like freight.......no reason for any part of any company to drag the whole company down .....curious as to what the dividend increase will be.....10% ?.........
They'll just get rid of all the management.
We have computers to tell us what to do...
 

tonyexpress

Whac-A-Troll Patrol
Staff member
UPS has a history of increasing its dividend every year. In a few weeks it will be announced that it is going up again, probably 10% or maybe even more...

"Tomé told Yahoo Finance Live the review had to happen so UPS could bring down its debt and costs, support higher dividend payouts, and position the business correctly for the future."
 

Brownslave688

You want a toe? I can get you a toe.
There was a $.12 loss per share in Q4 2019 and a $3.75 loss per share in 2020. I didn't and don't see an increase in the dividend.
Ups has increased dividends every year but one since going public. That year they held steady and it was 2009. I would say the odds are in favor of a dividend increase.
 

Brownslave688

You want a toe? I can get you a toe.
UPS has a history of increasing its dividend every year. In a few weeks it will be announced that it is going up again, probably 10% or maybe even more...

"Tomé told Yahoo Finance Live the review had to happen so UPS could bring down its debt and costs, support higher dividend payouts, and position the business correctly for the future."
They have went up 20-30 cents almost every single year. She may be looking to make a splash her first year as CEO.....Lets say a 7 cent per quarter increase is my guess.
 

tonyexpress

Whac-A-Troll Patrol
Staff member
Oh, it will go up, you can bet on that... just like GameStop did after Reddit made it happen. :love-very:

 

Up In Smoke

Well-Known Member
After reading their release and looking at their balance sheet, it's pretty clear why the dividend did nothing. The company is carrying a ton of debt (61.74b) and the shareholder equity is $.75b leaving them at a 81.99 debt to equity ratio. This number is a near record number for the company. A negative tangible book value of nearly 5b, after maintaining a positive cash flow of 4-5b over the last several years will have them scrambling for savings and minimal Capx for the foreseeable future. Investors beware. For comparison FedEx has 60b in debt but 21b in equity, giving them an impressive 2.86 ratio.
 
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