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.
Service changes
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.
