The company posted a record Q4 revenue of $24.9 billion
The Atlanta delivery giant said that the handling of the vacation bundle and the onset of the sale of the COVID-19 vaccine resulted in a 10.6 percent growth in volume over the last three months of 2020, sending Q4 net profits adjusted to $2.87 billion, or $2.66 a share, compared to $2.27 billion, $2.11, over the same period a year earlier. The company posted a record Q4 revenue of $24.9 billion, compared to $20.5 billion a year earlier.
Analysts surveyed by FactSet had predicted earnings of $2.14 per share. Analysts had estimated sales of $22.9 billion. However, a one-time expense took a toll on the bottom line when the corporation announced a net loss of $3.26 billion, minus $3.75 per share, owing to $5.6 billion in valuations—including a $4.9 billion mark-to-market pension charge—a $114 million post-tax impairment charge and a $545 million impairment charge related to the selling of UPS Freight to Canada’s TFI International.
UPS is expected to have $54 billion in long-term pension liabilities on the accounts
UPS is expected to have $54 billion in long-term pension liabilities on the accounts. It reported that, on its income statement, it acknowledges profits and losses on its pension assets as required by accounting principles. “I thank all users for their incredible ability to deliver industry-leading holiday services,” said Carol Tomé, UPS CEO. “In the fourth quarter, we started to transport vaccines to COVID-19, and we stand ready to bring promise and wellbeing of people around the world. “This is the highest quarterly operating profit in the company’s history, with record profits generated in each segment.”
For 2020, UPS posted a net income of $8.71 billion ,compared to $8.15 billion a year ago when sales grew by 20.7% to $84.62 billion compared to $74.09 billion in 2019.
On January 25, UPS announced the acquisition to TFI of its less-than-truckload UPS Freight division for $800 million, ending UPS’ 15 years in that market. At the time, Tomé described UPS Freight as “a capital-intensive, low-returning business” and allowed UPS to be “even more laser-focused on the essential aspects of our business that drive the highest value for our customers.”
As part of the sale, 14,500 full-time and part-time staff of UPS Freight will join TFI.
The firms have announced a five-year deal in which UPS Freight will continue to use UPS’s domestic package network to accommodate shipments.
UPS delivered “above 99 percent service” to distribute the vaccine.
In addition to the smashing of holiday-related shipping, UPS and FedEx Corp. Started shipping COVID-19 vaccines from Pfizer and Moderna worldwide in December, helping UPS’ healthcare-delivery sector. Tomé said that more than 45 days into the distribution process, UPS delivered “above 99 percent service” to distribute the vaccine. “As we look back at 2020 for the new year, we’re optimistic,” Tomé said.
As has been the case for the past 11 months, UPS said that the pandemic, state and local constraints, including home warrants, led to a boom in internet deliveries.
UPS said Q4 sales for domestic and overseas exports increased by two digits.
Domestic box sales grew 17.4% to $15.7 billion in Q4, compared to $13.4 billion in 2019. For the year, sales in the segment rose by 15.1% to $53.5 billion, compared to $46.5 billion in 2019. UPS said that it, hired more than 100,000 workers during Q4 to keep up with demand. While some of these hires were seasonal, the organization said in October that it needed a significant number of employees to continue on to satisfy the demands of e-commerce and medical shipments.