UPS Performs Well Despite Trade War Fears
Smart Logistics

UPS Performs Well Despite Trade War Fears

Third-quarter adjusted results exclude a pre-tax charge of $97 million

UPS has announced its third-quarter diluted earnings per share of $1.73, up more than 20%, and adjusted, diluted earnings per share of $1.82, up 26%.

Third-quarter adjusted results exclude a pre-tax charge of $97 million, or $0.09 per share after tax, due to transformation-related costs.

These projects are a part of the company’s transformation initiatives that will create efficiencies across the enterprise.  Transformation will also produce higher-quality revenue growth.

Despite the earnings, UPS is battling a difficult market with an ongoing trade war between the US and China stemming trade flows.

World Trade Stuttering Under Trade War

“Our business strategies position UPS to improve operating leverage and many of our actions are already contributing to performance gains,” said UPS Chairman and CEO David Abney.

“We generated another quarter of industry-leading margins and strong free cash flow and we are confident in the outlook for the business.”

Abney added: “Supply Chain and Freight performance was outstanding this quarter, as the unit delivered double-digit growth in both revenue and adjusted operating profit.

“UPS will continue to leverage our vast forwarding, customs, and supply-chain solutions to help customers expand their existing businesses and reach new markets.”

The company provides earnings per share guidance on an adjusted (non-GAAP) basis because it is not possible to predict or provide a reconciliation reflecting the impact of future required pension mark-to-market adjustments, which would be included in reported (GAAP) results. The impact of such adjustments could be material.

“Improvements in revenue quality and our new, highly-automated capacity gives us confidence in a successful peak season for our customers and shareowners”, said Richard Peretz, UPS’s chief financial officer.

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