By Kelly Yamanouchi
The Atlanta Journal-Constitution
ATLANTA — Package delivery giant UPS reported $1.4 billion in net income for 2020, a challenging year that brought a surge in online shopping capped off with a hectic holiday shipping season and the start of vaccine deliveries.
Sandy Springs, Georgia,-based UPS booked record revenue of $84.6 billion for the year, up 14% from 2019, amid a massive shift toward e-commerce during the COVID-19 pandemic as more consumers stayed home and ordered items online. In the busy fourth quarter, revenue soared 21% to $24.9 billion.
But delivering individual items to doorsteps is more costly for UPS than dropping off pallets of goods at stores, so Wall Street analysts are hoping for an economic recovery that will bring a rebound in more profitable business-to-business shipments this year. Profit also was weighed down by $5.6 billion in fourth-quarter charges.
UPS CEO Carol Tomé said in a written statement she is “optimistic” about 2021 and continued deliveries of COVID-19 vaccines.
Nonetheless, the company declined to forecast revenue or profit for 2021 given “continued economic uncertainty due to the global pandemic.”
In the fourth quarter, UPS took an accounting hit from $4.9 billion in non-cash, mark-to-market pension losses, a $556 million asset impairment charge for the recently announced sale of UPS Freight, and other costs. That resulted in a quarterly $3.3 billion loss.
Those items also decreased the company’s full-year net income, which UPS said would be nearly $7.2 billion excluding the pension losses and other charges. A year ago, UPS reported $4.4 billion in net income for 2019, including a $106 million fourth-quarter loss after pension and other charges.
Tomé said the company’s fourth-quarter performance in 2020 “exceeded our expectations” and thanked “customers who worked with us during this challenging year.”
Some of the challenges came during the record holiday shipping season when the coronavirus drove consumers to order more gifts online instead of venturing out to stores, overloading shipping networks and driving UPS and FedEx to enforce limits on how many packages it would pick up from retailers. That affected some of the companies’ biggest customers as well as smaller businesses that turned to the U.S. Postal Service — which in turn overloaded the post office and contributed to delivery delays.