UPS (UPS) Reports In-Line Q4 EPS, Revenues Miss; Offers FY20 EPS Guidance Below Consensus
UPS (NYSE: UPS) reported Q4 EPS of $2.11, in-line with the analyst estimate of $2.11. Revenue for the quarter came in at $20.57 billion versus the consensus estimate of $20.66 billion.
- 4Q19 Operating Profit Growth and Margin Expansion in All Segments
- 4Q19 Positive Operating Leverage Driven by Lower Unit Cost in the U.S.
- 4Q19 Diluted EPS of ($0.12); Adjusted* Diluted 4Q19 EPS Up 8.8% to $2.11
- 4Q19 U.S. Daily Volume Grew Nearly 9%; Next Day Air Volume Up Nearly 26%
- 2019 Cash from Operations of $8.6B; Adjusted Free Cash Flow Topped $4.1B
- Announces Full-Year 2020 Adjusted EPS Guidance Range of $7.76 to $8.06
- Speeding up time-in-transit and broadening weekend services in 2020 to capture profitable growth from Small- and Medium-sized Businesses (SMB)
“Our network improvements from transformation enabled UPS to embrace a surge in demand for air products while at the same time generate productivity improvements and positive operating leverage,” said David Abney, UPS chairman and CEO. “Looking to 2020, we will continue to adapt to the changing environment, strengthen our network and create new solutions to support our strategic growth initiatives and help our customers grow and compete.”
GUIDANCE:
UPS sees FY2020 EPS of $7.76-$8.06, versus the consensus of $8.07.
“UPS managed through several challenges in 2019, including declines in industrial production,” said Brian Newman, UPS’s chief financial officer. “We were able to leverage the capital investments we have made to grow profits and expand margins, and we are fast-tracking our initiatives in 2020 to better position UPS to capitalize on structural changes in the market and growth opportunities.”
- Adjusted, diluted earnings per share are expected to be in a range of $7.76 to $8.06, which includes forecasted weakness on the industrial side of the U.S. and global economies as well as spending on SMB initiatives that will significantly increase UPS competitiveness and will be EPS accretive in 2021.
- The 2020 effective tax rate is expected to be between 22.5 and 23.5 percent.
- Capital expenditures are planned to be around $6.7 billion, primarily to support global facility and automation expansions.
- Cash from operations is expected to be around $10 billion and free cash flow is anticipated to be between $4.3 and $4.7 billion.
- Transformation charges are excluded from guidance.
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