Before the opening bell on Tuesday, United Parcel Service Inc. (UPS, Financial) delivered first-quarter results that surpassed analyst projections on the back of a surge in online purchases during the pandemic.
The Atlanta-based courier and logistics company, which has been involved in the distribution of Covid-19 vaccines, posted adjusted earnings of $2.77 per share, topping Refinitiv's estimates of $1.72. Revenue grew 27% from the prior-year quarter to $22.9 billion, beating expectations of $20.49 billion.
In a statement, CEO Carol Tomé expressed her gratitude to UPS employees for "delivering what matters."
"During the quarter, we continued to execute our strategy under the better not bigger framework, which enabled us to win the best opportunities in the market and drove record financial results," she said.
UPS recorded growth across all its segments, with sales in the U.S. domestic division increasing 22.3% to $14.01 billion, driven by demand from small and medium-sized businesses. The international business' sales increased 36.2% to $4.6 billion, while the supply chain and freight unit recorded a 34.3% increase in revenue to $4.2 billion.
The company also reported its consolidated average daily volume, an important industry metric, inched up 14.3% year over year during the three months ended March 31.
Given the continued economic uncertainty related to the pandemic, UPS is not providing revenue or earnings guidance for 2021.
The company did, however, reaffirm its capital allocation plans, which include capital expenditures of about $4 billion and $2.5 billion in total debt repayments. It has no plans to repurchase shares at this time, but the effective tax rate for the remainder of the year is expected to be 23.5%.
Further, the $800 million sale of UPS Freight to TFI International Inc. (TFII, Financial), which was announced in January, is projected to close during the second quarter.
Boosted by the strong performance, shares of UPS were up over 11% on Thursday morning at $195.89. GuruFocus estimates the stock has gained 16.32% year to date.
Disclosure: No positions.
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