UPS Inc., (NYSE:UPS) as many had expected, posted strong third-quarter results Wednesday morning, reporting adjusted diluted earnings per share of $2.28, a 10.1% year-on-year increase and well above the median estimates of $1.86 a share of analysts surveyed by Barchart.
The Atlanta-based transport and logistics giant reported revenue of $21.2 billion, a 15.9% year-on-year increase. Operating profit of $2.4 billion was up 9.9%, while net income climbed 11.8% to $2 billion. The results included a $44 million pre-tax charge for the costs of re-engineering the company’s vast delivery infrastructure to handle more business-to-consumer (B2C) transactions driven by the surge in e-commerce activity.
UPS shares, which have more than doubled since its lows in March, were trading down about 1% in pre-market activity Wednesday.
UPS reported adjusted operating profits of $1.13 billion for its U.S. domestic package segment on revenue of $13.2 billion. For the 2019 quarter, adjusted operating profit came in at $1.24 billion on revenue of $11.4 billion. Average daily volumes rose 13.8% year-on-year, with growth across all U.S. products, the company said. Adjusted operating margins for the U.S. segment came in at 8.6%.
International package revenue came in at $4.08 billion, compared to $3.49 billion in the 2019 quarter. Adjusted operating profits rose to $972 million from $693 million, with average daily volumes up 12.1% field by strong outbound demand from Asia and double-digit export volume gains across UPS’ global system. Adjusted operating margins came in at 23.8%.
UPS’ Supply Chain and Freight Segment, which comprises all non-package businesses, posted revenue of $3.9 billion compared with $3.3 billion in 2019. Adjusted operating profits rose to $302 million from $256 million, the company said. UPS attributed the strong top-line results to better demand for its freight forwarding services supporting Asian outbound traffic.
The company cited strong Asian outbound demand and growth from the small to medium-sized business segment that it has been heavily focused on. UPS declined to give revenue and earnings guidance, citing the uncertainties surrounding the economic recovery.
