- The company’s revenue has grown consistently, with a positive 6.4 % over last year, touching $24.4 billion.
- UPS is reaffirming its unified financial goals for 2022, driven by corporate results in the first quarter and business potential in the second quarter.
Consistent growth in indicators
The Atlanta-based transportation and logistics giant released first-quarter results on Tuesday, providing a detailed look at the company’s capabilities amid an uncertain macroeconomic environment. , resulting in the first period of weaker-than-planned demand since Ms. Tomé took power in June 2020. Since then, the company’s revenue has grown consistently, with a positive 6.4 % over last year, touching $24.4 billion. Adjusted operating profit increased 12.1% to $3.3 billion, while operating margin came in at 113.6 percent, 70 basis points higher than last year.
All three business segments increased operating profit, with the smallest segment, Supply Chain Solutions, which posted $481 million in operating profit and an 11% operating margin, both new records, driven by the company’s strength in freight forwarding and healthcare services.
Challenges from the environment
The results come at a time when demand for the company’s full-service packages in the United States and internationally is slowing, something UPS hasn’t taken into account. Average daily US manufacturing volume also fell 3% year-over-year, pressured by 2021 results, as the US government’s stimulus packages fueled a boom in US spending consumers.
In addition, home deliveries dropped 7.4% year-on-year as higher food and fuel prices coupled with inflation uncertainties prompted consumers to tighten their spending. However, the drop was also partly offset by demand among businesses, which boosted the index by 3.6%. At the end of the quarter, business-to-business (B2B) transactions accounted for 43 percent of U.S deliveries, compared with 40 percent last year.
“We are continuing to pay close attention to macro factors, including COVID-19, supply chain constraints, inventories and inflationary pressures, as well as the geopolitical environment. Despite that backdrop, we are reaffirming our unified financial goals for 2022, driven by corporate results in the first quarter and business potential in the second quarter. Consolidated revenue is expected to be approximately $102 billion, including recovery of UPS shipping,” said Brian Newman, UPS CFO.
In the face of adversity, UPS has proven its ability to adapt to dynamic environments through its business results, giving us confidence in the future of this business.