UPS today announced third-quarter 2020 consolidated revenue of $21.2 billion, a 15.9% increase over the third quarter of 2019.  Consolidated average daily volume increased 13.5% year over year.  Net income was $2.0 billion for the quarter, 11.8% above the same period in 2019, or 10.7% on an adjusted basis.  Operating profit was $2.4 billion, up 11.0% compared to last year’s third quarter, or 9.9% on an adjusted basis.

Diluted earnings per share was $2.24 and adjusted diluted earnings per share was $2.28, up 10.1% from the same period last year.  GAAP results include a pre-tax transformation charge of $44 million, equivalent to $0.04 per share.  In the prior year period, GAAP results included a pre-tax charge for transformation costs of $63 million, equivalent to $0.06 per diluted share. 

 “Our performance highlights the agility of our global integrated network amid the ongoing challenges of the pandemic.  Our results were fueled by continued strong outbound demand from Asia and growth from small and medium-sized businesses,” said Carol Tomé, UPS chief executive officer.  “UPSers are everyday heroes who are keeping the world’s supply chains moving.  I want to thank our team for their ongoing commitment to our customers and the communities we serve.”

U.S. Domestic Segment

• Average daily volume increased 13.8%, with growth across all products and continued elevated residential demand.

• Operating margin was 8.3%; adjusted operating margin was 8.6%.

International Segment

• Average daily volume grew 12.1%, with double-digit export volume growth globally and continued strong outbound demand from Asia.

• Operating margin was 23.6%; adjusted operating margin was 23.8%.

Supply Chain and Freight Segment

• Revenue increased 16.5%, driven by strong freight forwarding demand out of Asia.

• Operating margin was 7.6%; adjusted operating margin was 7.7%.

_{* “Adjusted” amounts are non-GAAP financial measures. See the appendix to this release for a discussion of non-GAAP financial measures, including a reconciliation to the most closely correlated GAAP measure.}

Outlook

UPS is not providing consolidated revenue and diluted earnings per share guidance due to the uncertainty around the timing and pace of the economic recovery.  The company is unable to predict the extent of the business impact or the duration of the coronavirus pandemic, or reasonably estimate its operating performance in future quarters.

“Our Better, not Bigger approach had a positive impact on our performance in the quarter, specifically through the revenue-quality actions we’ve taken.  Additionally, we recently launched new initiatives to further reduce our costs,” said Brian Newman, UPS chief financial officer.  “Looking ahead to the fourth quarter, we are collaborating with our customers and using our proven tools to control volume and ensure the resiliency of our network.  We are focused on delivering a successful peak and generating cash returns.”