Earnings Results: UPS stock jumps after big profit and revenue beats, raised dividend

Excluding nonrecurring items, adjusted earnings per share rose to $3.59 from $2.66 a year ago, beating the FactSet consensus of $3.10. Last year’s results excluded $5.66 a share in defined-benefit plan charges.

Revenue grew 11.5% to $12.77 billion, above the FactSet consensus of $27.06 billion, fueled by strength in its domestic and international businesses.

Operating expenses growth was 4.5% to $23.88 billion, slower than revenue growth, to lift operating profit as a percentage of revenue to 14.0% from 8.2%.

Among UPS’s business segments, U.S. Domestic Package revenue increased 12.4% to $17.70, beating the FactSet consensus of $14.21 billion, and International Package revenue rose 13.1% to $5.40 billion to top expectations of $4.66 billion. Supply Chain & Freight revenue increased 6.7% to $4.68 billion, also above analyst projections of $4.24 billion.

Operating margin in its largest U.S. Domestic Package segment improved to 11.9% from 7.9% a year ago.

UPS also declared a quarterly dividend of $1.52 a share, up 49% from a year ago. The new dividend will be payable March 10 to shareholders of record on Feb. 22. Based on Monday’s stock closing price of $202.21, the new annual dividend rate implies a dividend yield of 3.01%, which compares with the yield for rival FedEx Corp.’s stock
FDX,
+0.44%
of 1.22% and the implied yield for the S&P 500 index
SPX,
+1.89%
of $1.38%.

Separately, for 2022, the company said it expects capital expenditures of $5.5 billion, to spend $5.2 billion on dividends and to buy back at least $1.0 billion worth of its shares.

UPS’s stock has lost 4.1% over the past three months through Monday, to underperform the Dow Jones Transportation Average
DJT,
+1.56%,
which slipped 3.9%, and the Dow Jones Industrial Average
DJIA,
+1.17%,
which eased 1.9%.