UPS (UPS) Q1 2021 earnings summary

Executive summary

• Q1 revenue rose 27% YoY to $22.9B; average daily volume increased 14.3%, with growth across all segments.

• Reported operating profit was $2.8B, up 158%; adjusted operating profit rose 164% to $2.95B. Diluted EPS was $5.47 reported and $2.77 adjusted.

• Management cited its “better not bigger” strategy and continued delivery of COVID-19 vaccines.

Financial highlights

• Revenue was $22.908B versus $18.035B in Q1 2020; currency-neutral revenue grew 25.8%.

• GAAP net income was $4.792B; adjusted net income was $2.430B, excluding pension MTM and transformation and other adjustments.

• GAAP diluted EPS was $5.47 versus adjusted diluted EPS of $2.77; adjusted EPS increased 141% YoY.

• Free cash flow was $3.712B, from $4.531B operating cash flow, $834M capital expenditures, and other listed cash flow items.

Outlook and guidance

• No 2021 revenue or diluted EPS guidance, citing continued economic uncertainty; further financial details were planned for Investor and Analyst Day on June 9.

• The planned sale of UPS Freight was expected to close in Q2 2021.

• The effective tax rate for the remainder of 2021 was expected to be 23.5%.