UPS: Covid-19 weighed on Q1 results

UPS has said that Covid-19 weighed on its first quarter results for this year.

In its consolidated results, UPS’s revenues increased by 5% to $18bn, “driven by growth in business-to-consumer shipments and gains in healthcare”.

The company’s net income, which “included material headwinds due to disruptions from the coronavirus pandemic, higher self-insurance accruals and other items”, was $965m — a 13% year-on-year decrease.

In its supply chain and freight division, UPS reported revenues of $3.2bn — a 0.7% year-on-year decrease.

“Revenue [in the supply chain and freight division] was negatively impacted by widespread reductions in global economic activity,” UPS said.

“The supply chain and freight segment is taking numerous actions to assist customers and improve financial performance as demand recovers, including activating aircraft charters from Asia, expanding customer relationships in the healthcare sector and applying peak surcharges where appropriate,” it added.

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UPS’s US domestic segment noted a revenue increase of 9.3% year on year, from $10.5bn in the first quarter of 2019 to $11.5bn in the first quarter of 2020.

For its international segment, UPS reported a 9% decrease in adjusted revenue — from $612m in Q1 2019 to $558m in Q1 2020.

Its international average daily volumes were also down 1.8% due to “declines in commercial deliveries”.

However, UPS said: “China volumes primarily rebounded in March as its economic recovery accelerated, offsetting declines in January and February.

“The company executed well to contain costs and target customer opportunities as the coronavirus pandemic rapidly spread from Asia to other parts of the world.”

UPS said that is “unable to predict the extent of the business impact or the duration of the coronavirus pandemic, or reasonably estimate its operating performance in future quarters”. As a result, the company has withdrawn its previously issued 2020 revenue and diluted earnings per share growth guidance.