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.