• Consolidated Revenue Increased 27%; Growth Across All Segments
• Consolidated Operating Profit Up 158% to $2.8B, Up 164% on an Adjusted* Basis
• Diluted EPS of $5.47; Adjusted Diluted EPS Up 141% to $2.77

UPS has announced first-quarter 2021 consolidated revenue of $22.9 billion, a 27% increase over the first quarter of 2020. Consolidated average daily volume increased 14.3% year over year. Consolidated operating profit was $2.8 billion, up 158% compared to the first quarter of 2020, and up 164% on an adjusted basis. Diluted earnings per share were $5.47 for the quarter, 393% above the same period in 2020, and up 141% on an adjusted basis.

For the first-quarter of 2021, GAAP results include a net benefit of $2.4 billion, or $2.70 per diluted share, comprised of an after-tax mark-to-market (MTM) pension benefit of $2.5 billion and after-tax transformation and other charges of $140 million. The MTM benefit was primarily driven by the enactment of the American Rescue Plan Act of 2021 (ARPA). The ARPA, which was signed into law on March 11, 2021, protects certain multi-employer pension plans from becoming insolvent through 2051, thereby eliminating the Company’s liability for potential coordinating benefits related to the Central States Pension Fund. Enactment of the ARPA required the Company to remeasure its UPS IBT Pension plan at current discount rates, which have increased since the previous measurement date. The overall result was a reduction in the pension liability of $6.4 billion.

“I want to thank all UPSers for delivering what matters, including COVID-19 vaccines,” said Carol Tomé, UPS chief executive officer. “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.”

U.S. Domestic Segment

• Revenue increased 22.3%, led by growth from small and medium-sized businesses.
• Revenue per piece increased 10.2%, driven by Ground products.
• Operating margin was 9.7%; adjusted operating margin was 10.4%.

International Segment

• Average daily volume grew 23.1%, with export growth from all regions.
• Revenue increased 36.2%, led by Asia and Europe.
• Operating margin was 23.6%; adjusted operating margin was 23.7%.

Supply Chain and Freight Segment

• Revenue increased 34.3%, driven by strong demand in nearly all businesses.
• Operating margin was 7.5%; adjusted operating margin was 9.2%.

_{* “Adjusted” amounts are non-GAAP financial measures. See the appendix to this release for a discussion of non-GAAP financial measures, including a reconciliation to the most closely correlated GAAP measure.}

Outlook

Given continued economic uncertainty, the Company is not providing 2021 revenue or diluted earnings per share guidance; however, it is re-affirming its full-year capital allocation plans. UPS has scheduled its 2021 Investor and Analyst Day for June 9, when it will share further financial details.

Reaffirms Full-Year 2021 Capital Allocation Plans

• The sale of UPS Freight is expected to close in the second quarter.
• Capital expenditures are planned to be about $4.0 billion.
• Long-term debt repayments, including $1.5 billion repaid in the first quarter of 2021, will total $2.5 billion.
• Effective tax rate for the remainder of the year is expected to be around 23.5%.
• The Company has no plans to repurchase shares.

Top Copyright Photo: UPS Airlines (UPS-Worldwide Services) Boeing 747-8F N626UP (msn 65781) PAE (Nick Dean). Image: 952877.

UP Airlines aircraft slide show: