United Parcel Service, Inc. (NYSE:UPS) stock rose 0.18% (As on October 25, 11:24:50 AM UTC-4, Source: Google Finance) after the company’s third quarter earnings came in ahead of expectations. In its US Domestic Segment, a 5.8% increase in revenue was driven by increased daily volumes, as an increase in revenue per piece drove a 3.4% increase in revenue for its International Segment. Supply Chain Solutions revenue grew 8% year-over-year, attributed to growth in air and ocean forwarding and the continued onboarding of USPS air cargo. In the U.S., online sales slowed and manufacturing activity was lower than we anticipated. This slowdown in manufacturing activity was also true outside of the U.S. as the company continues to see lower industrial production weigh on volume in certain geographies.
Moreover, the U.S. average daily volume, or ADV, increased 6.5% compared to the third quarter of 2023. In the third quarter, Ground average daily volume increased 8.9% and total air average daily volume was down 6.3%. The company continues to see customers shifting down from air to ground and some ground volume is shifting down to SurePost. For the quarter, B2B average daily volume was up 0.8% year over year, increasing for the first time in two years. Growth was driven by SMBs, which had an increase in B2B average daily volume of 3.8%. B2C average daily volume increased 11% year over year and made up 58.3% of our volume, a slight downward shift from the second quarter.
UPS in the third quarter of FY 24 has reported the adjusted earnings per share of $1.76, beating the analysts’ estimates for the adjusted earnings per share of $1.65. The company had reported the adjusted revenue growth of 5.6 percent to $22.2 billion in the third quarter of FY 24, which is inline with the analysts’ estimates for revenue of $22.2 billion. Consolidated operating profit was $2 billion, an increase of 22.8% versus the third quarter of 2023 and consolidated operating margin was 8.9%, an increase of 120 basis points compared to the third quarter of last year.
UPS also updated its full-year revenue and operating margin targets to reflect its third quarter results and its completed disposition of Coyote Logistics.
Full-year revenue is expected to be $91.1 billion, short of the $92 billion consensus, and margins are expected to be approximately 9.6%.