The Atlanta-based transportation giant reported that its second-quarter consolidated revenue increased to $20.5 billion, up 13.4 percent from the same quarter last year.
In early morning trading, UPS shares were $136.09, a 10 percent rise from the close on Wednesday (July 29) of $123.68.
Adjusted net income was $1.9 billion, a nearly 9 percent increase above Q2 in 2019. At the same time, adjusted operating profit was $2.3 billion, up 7.4 percent compared to last year’s Q2. Adjusted diluted earnings were $2.13 per share, an 8.7 percent increase from the same period last year.
GAAP results included a pre-tax charge of $112 million, equivalent to $0.10 per share. In the prior-year period, GAAP results included a pre-tax charge for transformation costs of $21 million, equivalent to $0.02 per share.
“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 CEO, in a statement. “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.”
Despite the strong quarter, UPS said it is unable to estimate its operating performance in future quarters.
“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, in a statement. “Our liquidity and cash position remains strong, allowing us to invest in enabling capabilities through this time of unprecedented business disruption.”
PYMNTS has reported that the cost to ship packages by UPS and FedEx increased as a result of the pandemic. In June, FedEx added a 30-cent surcharge to packages delivered to homes via Express and Ground for large retailers and manufacturers who ship 40,000 or more packages per week. There will also be an extra $30 charge for all oversized packages. Additionally, 40 cents will be added to deliveries that use SmartPost, the service that uses the U.S. Postal Service to deliver packages to homes.
The move by FedEx followed UPS’ announced surcharge in May of an extra 30 cents to packages shipped via UPS Ground and SurePost. Another surcharge of $31.45 was added for every large package shipped.