Apr 27 (Reuters) – United Parcel Service Inc on Tuesday reported record quarterly earnings and revenue from demand for home delivery and air travel during the pandemic.
Shares of the world’s largest parcel company soared 12.1% to $ 197.07 in early trading after it announced an increase in operating profit during the first quarter, when the cold winter briefly interrupted. the operations.
“The company beat our most conservative estimates as the leverage for local business – the key controversy over the stock – was very strong,” Bernstein analyst David Vernon wrote in a note to clients.
UPS’s business, like that of rivals FedEx Corp, DHL and Amazon.com Inc, has been booming since the pandemic pushed purchases of everything from food to furniture to the internet.
UPS, like FedEx, is a partner of the US government in the delivery of COVID-19 vaccines. UPS opened a control center to track vaccine shipments, and contributions from that business boosted profits during the quarter, President Carol Tomé said on a conference call.
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Tomé, in charge since June 1, has been cutting costs and is paying off.
Adjusted operating profit for the company’s domestic unit in the United States increased more than 273%, and international, bolstered by high-margin air shipments, grew almost 97%.
Total revenue increased 27% to $ 22.9 billion, beating estimates of $ 20.49 billion, according to Refinitiv data.
The company earned $ 2.77 per share, better than expected, not counting on the $ 2.5 billion boost from the American Rescue Plan Act of 2021 (ARPA), which was enacted during the quarter.
The law frees up cash by limiting the need to make contributions to pensions in the medium term. UPS said ARPA reduced its pension liability by $ 6.4 billion in total.
UPS executives said they had no share buyback plans and postponed dividend discussions until the company’s investor meeting in June.
(Report by Sanjana Shivdas in Bengaluru and Lisa Baertlein in Los Angeles, Edited in Spanish by Javier López de Lérida)