UPS Financial Overview
United Parcel Service (UPS) shares, which peaked at $192.88 in February 2022, are currently trading around $107, reflecting a significant decline. In 2023, UPS reported an average daily package volume of 22.29 million, down from 25.25 million in 2021. Total revenue has also decreased from $97.29 billion in 2021 to $90.96 billion in 2023, driven by reduced demand and rising operational costs.
In the wake of the pandemic, UPS’s operational metrics have deteriorated; its adjusted operating margin plummeted from 13.5% in 2021 to 10.9% in 2023, while diluted earnings per share (EPS) fell from $14.68 to $7.80 during the same period. Future estimates suggest a 3% decline in both revenue and EPS for 2025, with expectations of flat revenue but a 7% increase in EPS for 2026 due to margin-boosting efforts.
Notably, UPS’s logistics operations were strained following the indefinite grounding of its MD-11 aircraft, comprising 9% of its fleet, after a deadly incident in November. This has further pressured its operating margins during peak delivery seasons, with analysts awaiting insights from its upcoming Fourth Quarter earnings report on January 27, 2024.
