UPS posted a record high profit for the quarter, shares jumped
United Postal Service Inc. (UPS.N) on Tuesday reported a soaring quarterly profit and revenue as the door-step deliveries increased due to pandemic.
The firm’s shares jumped by 12.1% to reach $197.07 in early trading, after the operating profit improved during the first quarter, when winter weather briefly disturbed the operations.
In a client note, Bernstein analyst David Vernon wrote, “The company crushed our more conservative estimates, as operating leverage in the domestic segment was very strong.”
Not only UPS but also its rival’s, such as FedEx, Amazon, and DHL, business is booming, as the pandemic made everyone shift to online shopping.
Similar to FedEx, UPS has partnered with the government to deliver COVID-19 vaccines. UPS has opened a command centre in order to keep a track on the vaccine shipments, which helped the firm in bolster its profits for the quarter, as per the Chief Executive, Carol Tome.
Total revenue of the world’s biggest package delivery firm rose to 27% to $22.9 billion, beating estimates of $20.49 billion, according to Refinitiv data.
The company earned better than expected as the American Rescue Plan Act, 2021 (ARPA) was passed, which frees up cash by limiting the need to make pension contributions over the medium term. The law reduced our pension liability by $6.4 billion, as per UPS.
