Title: UPS Reports Q1 Revenue of $21.7B, Beats EPS Estimates, and Reaffirms 2024 Outlook

UPS (United Parcel Service Inc) has released its first-quarter FY24 results, reporting a revenue of $21.7 billion, slightly below market consensus of $21.9 billion. However, the company managed to beat EPS (Earnings Per Share) estimates, with adjusted EPS of $1.43 compared to the consensus of $1.30.

Despite the decline in revenue, UPS maintained a solid operating cash flow for the quarter, totaling $3.3 billion, with free cash flow reaching $2.3 billion. The company also reaffirmed its 2024 outlook, expecting revenue to be between $92 billion and $94.5 billion, higher than the consensus of $93.03 billion. Additionally, UPS projects an adjusted operating margin of 10% to 10.6% and capital expenditures of around $4.5 billion for 2024.

Breaking down the revenue by segment, the U.S. Domestic Segment experienced a 5% year-on-year decline, with revenue amounting to $14.2 billion. This was mainly due to a 3.2% decrease in average daily volume. The adjusted operating margin for this segment stood at 5.9%.

The International Segment also saw a decrease in revenue, amounting to $4.26 billion, showing a 6.3% decline year-on-year. The decrease in average daily volume, which amounted to 5.8%, contributed to this decline. Nonetheless, the adjusted operating margin for the International Segment was 16%.

The Supply Chain Solutions Segment experienced a 5.3% revenue decline, totaling $3.2 billion. This decline was primarily caused by market rate declines in forwarding. The adjusted operating margin for this segment was 7.0%.

In terms of future outlook, UPS recently disclosed winning a significant air cargo contract from the United States Postal Service (USPS), which is expected to contribute to their long-term growth. Last month, UPS also provided an outlook for FY26, with consolidated revenue projected to be between $108 billion and $114 billion, an adjusted operating margin above 13%, and free cash flow of $17 billion to $18 billion.

Following the release of the Q1 results, UPS shares traded slightly higher, with a premarket increase of 0.30% to $145.80.

Overall, while UPS faced a decline in revenue during Q1, the company managed to exceed EPS expectations and maintained strong operating cash flow. With a reaffirmed 2024 outlook and recent contract wins, UPS appears confident in its ability to navigate challenges and capitalize on future growth opportunities.