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Record-breaking third quarter with operating profit of US$2.9 billion, up 22.6% compared to the third quarter of 2020
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Consolidated revenue reached $23.2 billion, up 9.2% from last year
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Annual rate to go up by 5.9% amid inflation, supply chain bottlenecks and labor shortages
- Company raises full-year 2021 financial guidance
United Parcel Service (UPS) reported a record-breaking third quarter 2021 operating profit of US$2.9 billion, up 22.6% compared to the third quarter of 2020.
Consolidated revenue reached $23.2 billion, a 9.2% increase over the third quarter of 2020, and diluted earnings per share were $2.65 for the quarter, 18.3% above the same period in 2020.
In 2021, UPS has earned $8.9 billion in operating income, up 58% from the same period of 2020 as the company experiences its best year ever with two months to go before the year closes.
During the first nine months of 2021, “UPS has generated more operating profit than any full year in our history,” UPS CEO Carol Tomé said on a post-earnings call with investors and analysts.
Revenue from the US domestic segment was up 7.4%, driven by a 12.0% increase in revenue per piece. Operating margin was 9.9%, and adjusted operating margin was 10.0%.
Revenue from the international service segment increased 15.5%, with strong growth from all regions. Operating margin was 22.3%, and adjusted operating margin was 23.5%.
For supply chain solutions, revenue increased 8.4%, led by forwarding and logistics, which combined grew 35.4%. Operating margin was 10.3%, and adjusted operating margin was 10.5%.
Amidst supply chain and inflation woes, the supply chain giant continues to reap the benefits of a booming e-commerce as the Covid-19 pandemic continues.
The fourth quarter, which includes the holiday shopping and shipping season, is the busiest and most lucrative for UPS.
Moreover, 2022 could even be even rosier as UPS is set to raise its prices substantially.
UPS has announced a 5.9% hike in annual rate for 2022, higher than last year’s increase of 4.9%, as consumer prices continue their rapid climb and supply chain bottlenecks and labor shortages put more pressure on costs, according to a CNN report.
UPS has also started to provide Saturday service for both residential and commercial pickups and deliveries. This is in line with US President Joe Biden’s call to companies and ports to resolve the ongoing supply chain crisis impacting retailers and shippers by shifting to 24/7 operations to move more products during off-peak hours.
UPS’s commitment to expanded service comes as an estimated 500,000 containers of goods were reported early October to be waiting to be unloaded from dozens of container ships anchored and idling outside the Ports of Los Angeles and Long Beach in California.
For the full year in 2021, the company is raising its consolidated adjusted operating margin target to approximately 13.0.
Photo courtesy of UPS
