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UPS Q2 Earnings & Revenues Beat on Package Delivery Demand

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United Parcel Service (UPS - Free Report) reported second-quarter 2021 earnings (excluding a penny from non-recurring items) of $3.06 per share, beating the Zacks Consensus Estimate of $2.75. The bottom line surged 43.7% year over year with strong performances across all segments.

Quarterly revenues of $23,424 million also outperformed the Zacks Consensus Estimate of $23,085.4 million. The top line increased 14.5% year over year, driven by higher package delivery demand. Overall operating profit soared 47.3% year over year to $3.3 billion in the second quarter, boosted by double-digit growth in adjusted operating profit across all segments.

At the end of the second quarter, UPS generated free cash flow of $6,804 million, up 74.7% year over year.  The company’s capital expenditures were $1,670 million at the end of the same period.

United Parcel Service, Inc. Price, Consensus and EPS Surprise

United Parcel Service, Inc. Price, Consensus and EPS Surprise

United Parcel Service, Inc. price-consensus-eps-surprise-chart | United Parcel Service, Inc. Quote

Segmental Details

U.S. Domestic Package revenues increased 10.2% year over year to $14,402 million in the second quarter, driven by 13.4% increase in revenue per piece owing to robust improvement in all products. Segmental operating profit (adjusted) jumped 37.9% year over year to $1,675 million in the quarter. Adjusted operating margin in the June quarter was 11.6%.

Revenues at the International Package division summed $4,817 million, up 30%. The segment’s performance was driven by strong demand in Europe. Segmental operating profit (adjusted) totaled $1,190 million in the reported quarter, up 41.3%.

Supply Chain and Freight revenues augmented 14.3% to $4,205 million, aided by strength in demand across all businesses. Operating profit (on an adjusted basis) soared 52.8% to $408 million in the June quarter.

Outlook

UPS, currently carrying a Zacks Rank #3 (Hold), anticipates consolidated operating margin to be approximately 12.7% in the current year. Return on invested capital is expected to be approximately 28%. Capital expenditures are estimated to be $4 billion in 2021. For the remainder of the year, the company expects effective tax rate of about 23%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Sectorial Snapshots

Within the broader Transportation  sector, Delta Air Lines (DAL - Free Report) , J.B. Hunt Transport Services (JBHT - Free Report) and Kansas City Southern (KSU - Free Report) recently reported second-quarter 2021 results.

Delta, currently carrying a Zacks Rank of 3, incurred a loss (excluding $2.09 from non-recurring items) of $1.07 per share, narrower than the Zacks Consensus Estimate of a loss of $1.41.  Total revenues of $7,126 million also topped the Zacks Consensus Estimate of $6,340.9 million.

J.B. Hunt, presently carrying a Zacks Rank #3, reported earnings of $1.61 per share, surpassing the Zacks Consensus Estimate of $1.55.  Total operating revenues of $2908.4 million outperformed the Zacks Consensus Estimate of $2722 million.

Kansas City Southern, carrying a Zacks Rank #4 (Sell) at present, reported earnings (excluding $6.23 from non-recurring items) of $2.06 per share, missing the Zacks Consensus Estimate of $2.16.  Quarterly revenues of $749.5 million surpassed the Zacks Consensus Estimate of $733.1 million.