Earlier today, UPS reported their third quarter, 2020 revenues and to no one’s surprise, the results were again very positive. Consolidated revenues increased 15.9% across all segments. Revenues were $21.2 billion and daily volumes increased 13.5% year over year. Net Income was $2 Billion for the quarter an increase of 11.8% over the same period in 2019, and 10.7% on an adjusted basis.
UPS CEO Carol Tome, stated “Our performance highlights the agility of our global integrated network amid the ongoing challenges of the pandemic. Our results were fueled by continued strong outbound demand from Asia and growth from small and medium-sized businesses.” “UPSers are everyday heroes who are keeping the world’s supply chains moving. I want to thank our team for their ongoing commitment to our customers and the communities we serve.”
“Our Better, not Bigger approach had a positive impact on our performance in the quarter, specifically through the revenue-quality actions we’ve taken. Additionally, we recently launched new initiatives to further reduce our costs,” said Brian Newman, UPS chief financial officer. “Looking ahead to the fourth quarter, we are collaborating with our customers and using our proven tools to control volume and ensure the resiliency of our network. We are focused on delivering a successful peak and generating cash returns.”
Highlights from the Domestic Business Segment:
Average daily volume increased 13.8%, with growth across all products and continued elevated residential demand.
Operating margin was 8.3%; adjusted operating margin was 8.6%.
Highlights from the International Business Segment:
Average daily volume grew 12.1%, with double-digit export volume growth globally and continued strong outbound demand from Asia.
Operating margin was 23.6%; adjusted operating margin was 23.8%.
Highlights from the Supply Chain and Freight Business Segments:
Revenue increased 16.5%, driven by strong freight forwarding demand out of Asia.
Operating margin was 7.6%; adjusted operating margin was 7.7%.
The global Covid-19 Pandemic while devastating to the general public has been a boon for UPS and their competitors in the global parcel shipping business. It is expected that fourth quarter results will be as positive as they have been here in the third quarter and perhaps even better. The next big challenge for UPS and others in their space will be the global distribution of a Covid-19 vaccine. Hold onto your seats.
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