UPS Earnings: E-commerce Surge to 21% Jump Due to Covid-19

posted on 30th July 2020 by Eddie Saunders
UPS Earnings: E-commerce Surge to 21% Jump Due to Covid-19

“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.  “UPSers are keeping the world moving during this time of need and I want to thank our team for their hard work and outstanding efforts to serve our customers, our communities and each other.”

U.S. Domestic Segment

   2Q 2020Adjusted
2Q 2020
  2Q 2019Adjusted
2Q 2019
Revenue$13,074 M $11,150 M 
Operating profit$1,182 M$ 1,215 M$1,208 M$1,226 M
  • Average daily volume increased 22.8%, reaching 21.1 million packages per day.
  • Demand for residential delivery surged in the quarter, driving B2C shipment growth up 65.2%.
  • Operating margin was 9.0%; adjusted operating margin was 9.3%.

International Segment

   2Q 2020Adjusted
2Q 2020
  2Q 2019Adjusted
2Q 2019
Revenue$3,705 M $3,505 M 
Operating profit$771 M$ 842 M$663 M$665 M
  • Average daily volume grew 9.8%, driven by strong outbound demand from Asia and an increase in cross-border e-commerce in Europe.
  • Operating margin was 20.8%; adjusted operating margin was 22.7%.

Supply Chain and Freight Segment

   2Q 2020Adjusted
2Q 2020
  2Q 2019Adjusted
2Q 2019
Revenue$3,680 M $3,393 M 
Operating profit$259 M$ 267 M$272 M$273 M
  • 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 LTL and truckload brokerage units.
  • Operating margin was 7.0%; adjusted operating margin was 7.3%.

Outlook

“Using the scale and flexibility of our global integrated network, we successfully managed operational challenges throughout the quarter.  Moving forward we are focusing on efficiency and revenue quality to improve U.S. operating margins longer term,” said Brian Newman, UPS chief financial officer.  “Our liquidity and cash position remain strong, allowing us to invest in enabling capabilities through this time of unprecedented business disruption.”

Conference Call Information

UPS CEO Carol Tomé and CFO Brian Newman will discuss second-quarter results with investors and analysts during a conference call at 8:30 a.m. ET, July 30, 2020.  That call will be open to others through a live Webcast.  To access the call, go to www.investors.ups.com and click on “Earnings Webcast.” Additional financial information is included in the detailed financial schedules being posted on www.investors.ups.com under “Financials” and as filed with the SEC as an exhibit to our Current Report on Form 8-K.