UPS revenue climbs 14.5% in Q2 on robust online delivery growth

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UPS revenue climbs 14.5% in Q2 on robust online delivery growth

 UPS revenue climbs 14.5% in Q2 on robust online delivery growth
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Summary

  • UPS’s (NYSE: UPS) revenue jumped by 14.5% to US$23.42 billion YoY, beating estimates of US$23.24 billion.
  • Its consolidated operating profit increased by 40.8% to US$3.3B on an adjusted basis from last year, while diluted earnings per share rose by 50.2% to US$3.05 YoY.
  • A significant part of the revenue has been contributed by increased air shipments of e-commerce goods and Covid-19 vaccines, the company said in a release.

United Parcel Service Inc (NYSE: UPS) on Tuesday reported a 14.5% revenue growth in the second quarter boosted by a strong online delivery push, beating Wall Street estimates.

Presenting the quarterly results, UPS CEO credited the solid financial results to the company’s high delivery efficiency focused on a “better framework” for services.

A significant part of the revenue has been contributed by increased air shipments of e-commerce goods and Covid-19 vaccines, the company said in a release.

Its revenue jumped by 14.5% to US$23.42 billion YoY, beating estimates of US$23.24 billion.

Analysts forecast a sustained volume growth for the company as online orders are expected to continue in the backdrop of a pandemic-fuelled expansion of e-commerce.

The company benefitted the most from increased deliveries of medical devices and medicines during the quarter, they noted.

Revenue from the domestic market rose by 10.2%, while the international segment saw a 30% growth, mainly due to orders from Europe.

UPS said rate hikes coupled with increased demand from small and medium-sized businesses would likely contribute to its half of the margin in the US market.

Barring items, the company earned US$3.06 per share during the reporting period, above analysts' estimates of US$2.82, Refinitiv data shows.

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Revenue stats

UPS’s consolidated operating profit increased by 40.8% to US$3.3B on an adjusted basis from last year, while diluted earnings per share rose by 50.2% to US$3.05 YoY.

The GAAP results include after-tax conversion and other charges of US$11 million, or comparable to US$0.01 per share, the company said in the report. During the quarter, the company also concluded the divestiture of the UPS Freight segment, resulting in the re-assessment of pension and postretirement benefit schemes. As a result, it helped lower the liabilities to a tune of US$2.1 billion, although it had no significant impact on net earnings.

The company also generated US$8.5 billion in cash from operations YTD, which was an increase of 42.2% compared to the corresponding period of 2020. Its free cash flow rose by 74.7% to US$6.8 billion, which was above the first six months of last year. However, the UPS stock was down 9.22% to US$190.51 from the previous close at 10:10 am ET on Tuesday.

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