Online shopping surge delivers record revenue for UPS

NEW YORK (AP) — A surge in online shopping helped UPS post record revenue during the last three months of 2020, the company said Tuesday.

Its stock rose more than 3% in afternoon trading.

Demand for UPS and other delivery companies has spiked as more people shop online during the pandemic and avoid going into stores. Not only was the Atlanta company working to deliver gifts during the holiday season, but it also started shipping COVID-19 vaccines at the same time. To keep up, it hired thousands of more workers and saved space for the vaccines, which need to be kept in deep freezers. During the quarter, UPS said the daily average number of packages it delivered rose nearly 11%.

Its biggest customer — online shopping giant Amazon — helped fuel growth.

Amazon accounted for 13.3% of UPS’s total revenue last year, up from 11.6% the year before, said UPS CEO Carol Tome. She expects pandemic-fueled online shopping habits to stick, even as more stores reopen.

“We’re in a new normal,” said Tome. “Even my relatives, who are older, are shopping online. Before, they would never do that.”

UPS said revenue rose 21% to $24.9 billion in the three months ending Dec. 31, a record for the company.

However, it posted a loss of $3.26 billion, or $3.75 per share, as costs rose and it took charges on pension obligations and the sale of its UPS freight business. The year before, it reported a much smaller loss of $106 million.

But when adjusted to remove charges, UPS said it earned $2.66 per share, easily beating Wall Street expectations.

Full-year revenue totaled $84.6 billion, with adjusted profit of $8.23 per share. Both were records for UPS.

Shares of United Parcel Service Inc. rose $5.28, or 3.4%, to $161.54 Tuesday afternoon.