UPS Soars 14% on Delivering Crushing Q2 Earnings
The stock in United Parcel Service, Inc. soared 14% to $140.99 per share (NYSE: UPS) on delivering strong second-quarter earnings results that crushed Wall Street's projections.
The package delivery firm said in the three months through June that it generated $20.5 billion in sales, up 13% year-over-year on earnings of $2.13 a share. The results clobbered analysts' projections of $17.5 billion in sales and $1.07 a share for earnings.
Its U.S. domestic service average daily volume rose by a record of 23% to 21.1 million packages a day, as reported by Fox Business. The growth in the segment was thanks to high demand in residential delivery, resulting in a 65% increase in business-to-consumer volumes.
"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 health care shipments and strong outbound demand from Asia," Carol Tomé, the chief executive officer of said in a statement today.
Before joining UPS in March this year, Tomé, served as Executive Vice President and Chief Financial Officer of The Home Depot, Inc. Tomé's management of UPS thus far has been widely applauded on the Street.
The news also had a positive impact on another e-commerce delivery company FedEx Corp., (NYSE: FDX) whose stock was trading nearly 3% higher at $173.16 per share by midday Thursday.
However, UPS could not lift the markets today, as stocks are down after U.S. gross domestic product tumbled at a 32.9% annualized rate in the second quarter. The figure, which measures economic activity was more than three times worse than the previous record of 10% in 1958. Intraday, the Dow Jones lost 314 points, the Nasdaq Composite dropped 22 points and S&P 500 inched nearly 1% lower.
Amid the uncertainty, UPS opted not to provide guidance. Brian Newman, the chief financial officer of UPS said, "Moving forward we are focusing on efficiency and revenue quality to improve U.S. operating margins longer term."
Shares of UPS have risen nearly 20% year-to-date.