Strong Comps Help Send UPS Results Sharply Higher

UPS Inc. UPS reported a 14% increase in second-quarter revenue to $23.4 billion, with adjusted operating income up 40.8% and diluted earnings per share up 43.7% to $3.05, 34 cents higher than the median estimates of analysts polled on Barchart.

The gains were led by the Atlanta-based company's international parcel segment, which benefited from easy comparable results over the second quarter of 2020 when much of regular global commerce was curtailed due to pandemic-fueled government shutdowns. International revenue rose 30% to $4.8 billion, led by gains in Europe. The adjusted operating margin rose 24.7%, with adjusted operating profits up to $1.19 billion from $842 million, UPS said.

The company's U.S. domestic parcel segment, its largest, posted revenue of $14.4 billion, up 10.2%. Revenue per piece increased 13.4% on strong across-the-board product gains, UPS said. Adjusted operating margin grew 11.6%, while adjusted operating profit rose to $1.675 billion from more than $1.2 billion, a more than 30% year-on-year increase.

UPS' Supply Chain Solutions segment, which comprises all of the company's non package businesses, posted a 14.3% increase in revenue to $4.2 billion on strong demand across its lines, UPS said. The adjusted operating margin rose 9.7%, while the adjusted operating profit rose to $408 million from $207 million.

The unit's name was changed to reflect the $800 million sales of UPS' former LTL unit to Canadian firm TFI International Inc. TFI. The deal closed on April 30 during UPS' second quarter.

UPS forecast a 12.7% operating margin for 2021. Capital expenditures for the year are scheduled to be $4 billion.

Shares in pre-market trading were down 2.4% amid weakness in U.S. equity markets.

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