Analyst Note| Matthew Young, CFA |
Small-package delivery giant UPS' second-quarter revenue increased 13% year over year, surprisingly better than the 5% growth posted last quarter and ahead of our forecast. The pandemic has materially accelerated the broader shift to e-commerce sales for large retailers, driving another spike in residential deliveries across the U.S. and Europe. Also, strong airfreight demand out of Asia benefited the international package and global forwarding units. Overall, solid Asia outbound demand and robust B2C package growth more than offset depressed B2B package activity and a pullback in demand for the truckload brokerage and less-than-truckload trucking divisions.