UPS revenues hit by market downturn

Express services giant UPS was hit by air cargo demand decline in the fourth quarter of 2022.

The cargo carrier’s fourth quarter consolidated revenue was $27bn, down 2.7% on the same three months of 2021.

Consolidated operating profit fell by 17.9% in the final three months of 2022 compared to the same quarter of 2021 to $3.2bn (though it was down only 3.3% on an adjusted basis).

Revenues in UPS’s international segment were hit by softness on China trade lanes, while revenue in its Supply Chain Solutions business was hit hard by volume and market rate declines in air and ocean freight forwarding, though this was partly offset by healthy growth in UPS’s healthcare business.

For the full year, consolidated revenue increased by 3.1% over 2021 to reach $100.3bn, and UPS made an operating profit of £13.1bn; the adjusted operating profit reached $13.9bn, up 5.4% on 2021.

The operating margin was 13%, the adjusted operating margin 13.8%.

Chief executive Carol Tomé referred to UPS having provided “industry-leading service”.

She noted: “For the year, we reached our targeted consolidated operating margin and return on invested capital goals one year earlier than originally anticipated. Our results in 2022 demonstrate our strategy is working.”

Looking ahead, UPS is predicting that for the full year 2023, revenue will be between $97bn and $99.4bn, with a consolidated adjusted operating margin of between 12.8% and 13.6%.