UPS announced Q2 2020 consolidated revenue increased to $20.5bn, a 13.4% increase from the Q2 2019. Net income was $1.8bn for the quarter; adjusted net income was $1.9bn, 8.8% above the same period in 2019. Operating profit was $2.2bn, and adjusted operating profit was $2.3bn, up 7.4% compared to last year’s second quarter.
“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.
UPS’ U.S. Domestic Segment revenue increased by 17.3% from $11.1bn in Q2 2019 to $13.0bn, whilst operating profit fell by 2.2% year-on-year. Operating margin was 9.0% for the quarter. The segment’s average daily volume increased 22.8%, reaching 21.1m packages per day as Demand for residential delivery surged in the quarter, driving B2C shipment growth up 65.2%.
Its International Segment saw revenue increase by 5.7% to $3.7bn. The segment’s operating profit also rose from $663m in Q2 2019 to $771m in Q2 2020, an increase of 16.3% year-on-year. Operating margin was 20.8%. The average daily volume grew 9.8%, driven by strong outbound demand from Asia and an increase in cross-border e-commerce in Europe.
The Supply Chain and Freight Segment also performed well during Q2. Its revenues increased by 8.5% to $3.6bn 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. Its operating profit, however, was down from $272m in Q2 2019 to $259m in Q2 2020, a decline of 4.8% year-on-year.
Regarding the outlook, UPS has commented, “UPS is not providing revenue and diluted earnings per share guidance due to the uncertainty around the timing and pace of the economic recovery. The company is unable to predict the extent of the business impact or the duration of the coronavirus pandemic, or reasonably estimate its operating performance in future quarters.”
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