UPS announced first-quarter 2023 consolidated revenues of $22.9 billion, a 6.0% decrease from the first quarter of 2022. Consolidated operating profit was $2.5 billion, down 21.8% compared to the first quarter of 2022, and down 22.8% on an adjusted basis. Diluted earnings per share were $2.19 for the quarter; adjusted diluted earnings per share of $2.20 were 27.9% below the same period in 2022.

For the first quarter of 2023, GAAP results included after-tax transformation and other charges of $9.0 million, or $0.01 per diluted share.

“I want to thank all UPSers for delivering industry-leading service to our customers,” said Carol Tomé, UPS chief executive officer. “In the first quarter, deceleration in U.S. retail sales resulted in lower volume than we anticipated, and we faced ongoing demand weakness in Asia. In response, we focused on controlling what we could control and delivered first-quarter consolidated operating profit and operating margin in line with our base case targets. Given current macro conditions, we expect volume to remain under pressure. We will remain focused on driving productivity while investing in efficiency and growth initiatives, enabling us to come out of this demand cycle even stronger.”

U.S. Domestic Segment

• Revenue decreased 0.9%, driven by a 5.4% decrease in average daily volume, which was nearly offset by a 4.8% increase in revenue per piece.

• Operating margin was 9.8%; adjusted operating margin was 9.9%.

International Segment

• Revenue decreased 6.8%, driven by a 6.2% reduction in average daily volume due to lower domestic volume and softness in China trade lanes.

• Operating margin was 18.2%; adjusted operating margin was 17.7%.

Supply Chain Solutions¹

• Revenue decreased 22.5% due to market rate and volume declines in forwarding, partially offset by growth in our healthcare business.

• Operating margin was 7.3%; adjusted operating margin was 7.6%.

2023 Outlook

The company provides certain guidance on an adjusted (non-GAAP) basis because it is not possible to predict or provide a reconciliation reflecting the impact of future pension adjustments or other unanticipated events, which would be included in reported (GAAP) results and could be material.

In January, UPS provided a range for its 2023 financial targets based on the macroeconomic forecast at that time. Over the first quarter of 2023, the global volume environment deteriorated due to challenging macro conditions and changes in consumer behavior. As a result, UPS expects full-year revenue and adjusted operating margin to be at the low end of its previously guided range.

2023 full-year financial targets are:

• Consolidated revenue of around $97.0 billion

• Consolidated adjusted operating margin of around 12.8%

• Capital expenditures of approximately $5.3 billion

• Dividend payments, subject to board approval, of about $5.4 billion

• Share repurchases targeted to be around $3 billion