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United Parcel Service Inc Class B UPS

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UPS’ Q2 Yields Robust and Underlying Demand Solid, but Comparisons Now Tough and Labor Costs Rising

Matthew Young, CFA Equity Analyst

Analyst Note

| Matthew Young, CFA |

Healthy underlying demand and pricing continued in UPS’ second quarter, with revenue up 15% year over year (27% last quarter). Growth was slightly above our forecast as impressive yield gains offset lower-than-expected ground volume trends related to noise from the onset of tough comparisons. Continuing the theme of previous quarters, the pandemic has driven a massive surge in residential package-delivery demand across all segments. At the same time, B2B activity has clawed its way back on economic recovery. Limited airlift capacity continued to bolster the international package unit as well. International and domestic B2C package volumes swung to year-over-year declines, but that’s primarily because of incredibly tough comparisons--residential deliveries surged in the same period last year.

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Company Profile

Business Description

As the world's largest parcel delivery company, UPS manages a massive fleet of more than 500 planes and 100,000 vehicles, along with many hundreds of sorting facilities, to deliver an average of about 22 million packages per day to residences and businesses across the globe. UPS' domestic U.S. package operations generate 61% of total revenue while international package makes up 20%. Less-than-truckload shipping, air and ocean freight forwarding, truckload brokerage, and contract logistics make up the remaining 19%.

Contact
55 Glenlake Parkway, N.E. Atlanta
Atlanta, GA, 30328
T +1 404 828-6000
Sector Industrials
Industry Integrated Freight & Logistics
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 543,000

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