UPS revenue tops estimates as pandemic drives e-commerce deliveries
(Reuters) -United Parcel Service Inc’s on Tuesday posted record quarterly profit and revenue on pandemic-fueled demand for air transportation and doorstep deliveries.
Shares in the world’s biggest package delivery firm soared 10.3% to $193.90 in early trading, after the company reported a 164% jump in adjusted operating profit for the first quarter, when severe winter weather briefly disrupted operations.
Business has boomed at UPS and rivals like FedEx Corp, DHL and Amazon.com Inc since the pandemic shifted purchases of everything from food to furniture online.
UPS, like FedEx, is a U.S. government partner in delivering COVID-19 vaccines. UPS opened a command center to track vaccine shipments, and contributions from that premium business bolstered profits during the quarter, Chief Executive Carol Tomé said on a conference call.
Revenue in its core U.S. domestic unit rose 22.3%, led by growth from small- and medium-sized businesses. The company’s international business also outperformed, bolstered by high-margin air shipments.
Excluding items, the company earned $2.77 per share.
Total revenue rose 27% to $22.9 billion, beating estimates of $20.49 billion, according to Refinitiv data.
The company’s balance sheet got a boost from the American Rescue Plan Act of 2021 (ARPA), which was signed into law during the quarter. The law frees up cash by limiting the need to make pension contributions over the medium term. UPS said the law reduced its pension liability by $6.4 billion overall.
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