United Parcel Service (UPS) announced better-than-expected earnings in the second quarter of the year on the back of a COVID-19 pandemic-related spike in home deliveries, healthcare shipments, e-commerce, and outbound demand from Asia.
Consolidated revenue increased to US$20.5 billion in the second quarter, a 13.4% increase from the second quarter of 2019, said the Atlanta, US-based logistics and transport giant in a statement released July 30.
Adjusted net income was $1.9 billion, 8.8% above the same period in 2019. Adjusted operating profit was $2.3 billion, up 7.4% compared to last year’s second quarter.
“Our results were better than we expected, driven in part by the changes in demand that emerged from the pandemic, including a surge in residential volume, COVID-19 related healthcare shipments and strong outbound demand from Asia,” said Carol Tomé, UPS chief executive officer.
US and international operations both yielded growth as revenue and operating profit showed higher figures in the second quarter of this year compared to the same period in 2019, said UPS.
Average daily volume in the international market grew 9.8%, driven by strong outbound demand from Asia and an increase in cross-border e-commerce in Europe.
In the US, average daily domestic volume increased 22.8%, reaching 21.1 million packages per day. Demand for residential delivery surged in the quarter, driving business-to-consumer shipment growth up 65.2%.
In the supply chain and freight segment, revenue increased 8.5%, driven by elevated air freight forwarding demand out of Asia, offset in part by weaker demand early in the quarter in the less-than-truckload and truckload brokerage units.
UPS declined to provide any revenue and earnings guidance “due to the uncertainty around the timing and pace of the economic recovery.”
“The company is unable to predict the extent of the business impact or the duration of the coronavirus pandemic, or reasonably estimate its operating performance in future quarters,” it said.
Photo courtesy of UPS
