United Parcel Service reported a jump in quarterly gain and revenue despite a dip in residential deliveries as pandemic lockdowns increased.
The parcel delivery company said revenue jumped to $23.4 billion in the second quarter, up 14.5 percent from a year earlier. That was slightly overhead analysts’ expectations of $23.2 billion, according to a Refinitiv survey.
Net income rose to $2.7 billion, or $3.05 per share, compared to $1.77 billion, or $2.03 per share, in the previous year’s quarter. When adjusting for one-time items, the company reported earnings of $3.05 per share, a 50.2 percent increase from final year’s second-quarter results and overhead expectations of $2.82 per share.
In the US, revenue rose 10.2 percent due to powerful improvement across all product lines. Adjusted operating gain was $1.7 billion, up from $1.2 billion in the second quarter of 2020. The segment’s adjusted operating margin rose to 11.6 percent, the company’s highest second-quarter operating margin since 2017.
UPS’s gains in the US are partly due to growth in weekend services, with ground delivery on Saturday jumping 13 percent. The Atlanta-based company expects to cover 90 percent of the U.S. population on Saturday by the end of October, said Carol Tomei, CEO.
“These improvements benefit all of our customers, big and little, by allowing faster transit times and expanding capacity,” she said.
However, average daily volume in the US decreased by 2.9 percent, led by a drop in the SurePost residential floor service which fell by 15.8 percent. Brian Newman, UPS’s chief financial officer, said the company’s channel business grew 25.7 percent as more retail foot traffic returned to traditional locations.
“As expected, the increase in essential goods delivered to homes final year created tough year-over-year comparisons,” he said. “As a result, in the second quarter of this year, the whole average daily volume in the United States decreased by 619 pieces per day.”
Foreign revenue increased 30 percent to $4.8 billion, driven by powerful performance in Europe, while operating gain rose to $1.2 billion from $842 million final year. Average daily volumes in the retail channel internationally fell less than the contraction in the US – 4.1 percent – and business-to-business grew by 25 percent.
“These annual comparisons reflect the unique epidemiological effects from final year العام [business to consumer] It doubled in the second quarter of 2020, Neumann said.