In the midst of gridlocked supply chains and inflation woes, UPS continues to benefit from the increase in online shopping as the Covid-19 pandemic persists.
During the first 9 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 Tuesday. The company’s operating profit rose to $2.9 billion in the third quarter, up 22.6% from last year. In 2021, UPS has earned $8.9 billion in operating income, up 58% from the same period of 2020.
The company’s record-breaking third-quarter earnings beat analysts expectations, sending shares up more than 7% Tuesday morning.
Typically, the fourth quarter, which includes the holiday shopping and shipping season, is the busiest and most lucrative for UPS.
Consumer prices are rising at the fastest 12-month pace since 2008, and supply chain bottlenecks plus a labor shortage are only putting more pressure on costs. UPS announced an annual rate increase of 5.9% for 2022 during Tuesday’s call. That’s higher than last year’s increase of 4.9%.
UPS also confirmed its US weekend service will be expanded by the end of this week as expected. The company will now provide Saturday service to about 90% of US markets for both residential and commercial pickups and deliveries, Tomé said.