And how do you see that evolving over time? It's just the growth rates won't be the same. And I just want to make sure we're really clear on that. Not getting better, but it's not getting worse on the pure B2B. Highlights of Q2 Earnings UPS’ earnings (excluding 10 cents from non-recurring items) per share of $2.13 surpassed the Zacks Consensus Estimate of … Tool Kit Collapse. Through the second quarter, we faced challenges from the coronavirus pandemic and resulting recession. If your full time, your benefits kick in at 30 days. You can't do it overnight. Hey, good morning. And in the pilots, we saw a 2-percentage-point reduction in churn. And Scott, I'll turn it back to you. Zacks. UPS earnings call for the period ending September 30, 2020. We are focused on diversity and inclusion and fighting for racial justice and reform. It's continuous, but the combination of rightsizing the revenue and driving productivity and efficiency gives us a path to drive operating margin expansion in the U.S. Want to see which stocks are moving? No better opportunity if you have the financial wherewithal to do so to invest through the crisis so that when things settle down, you are positioned to take share. And in fact, if you look at it, life to date, on a net basis after investing, we have delivered over $1 billion of savings in Transformation 1.0. Asia was the first region to face the pandemic and was also the first to reopen, which led to a strong increase in export volume and revenue as we came out of the first quarter. Following our prepared remarks, we will take questions from those joining us via the teleconference. And then I guess do you think you can -- when do you think you can get back to a double-digit margin? Learn more. And Ken, as we've talked before, I think the focus in international, it's on EBIT dollars because I think the team really have an opportunity to drive their share at those elevated margin levels. So I just wanted to kind of get a sense of what are the sort of steps that you need to take to be able to get that profit to grow in line with the revenue at least closer. Hey, great. And why am I focusing on SMB? If I look to the future of UBS, my goal is to get CEO succession-ready candidate. My second learning is to invest in your people. This under-the-radar company is not yet a household name. Shares are up 5.7% since reporting last quarter. Thank you. We're very focused on moving that in the opposite direction, moving it up. Share. Please go ahead. And so we're now reaching 85% in the U.S. system, so we feel pretty good about our ability to manage that volume. UPS is a special company with a unique culture, powered by more than 528,000 UPSers around the world. We are moving from a company, as an example. Latest Stock Picks Investing Basics Premium … Please go ahead. Now that matters because in this segment, for every reduction in churn, it's $170 million in revenue. First, we quickly leaned into the opportunity created by the reduction of passenger belly space. In the quarter, you talked about a mini peak or peak-like conditions, where you had some network constraints. Or do you think there's a multiyear potential capital investment program around the corner? To your question about, well, OK, great, I get the capital, which is the denominator side. 3-min read. A few other items on the income statement include other pension income, which was $327 million, driven by last year's 17.5% return on pension assets and lower discount rates. Included in our results is $370 million from the federal payroll tax deferral. I'm happy to do so. What's getting the way of going faster? We're moving to analytical decision science, as Juan and his team built out our digital factory, and that's going to free up productivity. Those are very good learnings in a downturn. Yes. Also, opportunities to manage with our customers. Thursday marked the first earnings day for new CEO Carol Tome, a former Home Depot Inc. executive and UPS board member who succeeded long-time leader David Abney in June. Or is that not the right way to looking at going forward? We didn't have to fly as many planes, so we had an opportunity to buy more of those 747s because they're coming out of production. While average daily volume growth was led by many of our larger customers, SMBs rebounded over the quarter, from a decline of 7.2% in April to growth of 17.8% in May, and 22.4% in June. But we said, no, we're going to pull that forward, and we're going to invest through the crisis. In terms of experience, in terms of just knowledge in certain areas, and they map that up against both internal and external candidates. Are these kind of the start-up costs, and that's going away? In response, we adjusted our network to support our customers' needs, we managed cost and leaned into three significant changes in demand in the markets we serve. So SMBs, which we're also very focused, on they were up 11% in the quarter. UPS Releases 3Q 2020 Earnings. That's on a cumulative basis. By our estimate, both our time in transit and weekend enhancements drove roughly $100 million of incremental revenue in the second quarter. We have taken measures to ensure the safety of our people while delivering critical shipments and everyday essentials, where and when they are needed. On a net basis, $1.1 billion in savings. Historical Financials 78.5 KB. And I know there are obviously outsized gains in Asia and what have you. We wish you a very good remainder of your day, and then we look forward to speaking with you next quarter. Hi. Our first principle is our values. We look forward to updating you on our progress. 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The portions of the supply chain and freight segment more aligned to industrial activity saw weakness during the quarter. Are we selling all of those products? Our third guiding principle is retaining a strong investment-grade credit rating, ensuring that we have financial flexibility needed to competitively run our business. Learn about financial terms, types of investments, trading strategies and more. As a percentage of total volume, B2B shipments were 27% in early May. Amit Mehrotra -- Deutsche Bank -- Analyst. Please go ahead. Due to ongoing COVID-related sheltering in place, retail store closures, and changes in U.S. consumer spending fueled by the economic stimulus, we experienced unprecedented demand and record high-volume levels. In fact, B2C volume jumped 65.2% year over year, which is 5.8 million additional pieces per day, and B2C represented 69% of total volume. Please go ahead. Now with longer term, this is where we're very excited about what we're going to do with our company. The firm that called the Exact Peak of the Dot-Com boom has just issued another major prediction. This is a big company to turn. We're very excited about that because that's one of our top 10 growth markets. Carol, congrats on the appointment of CEO. Looking at the overall enterprise. One, invest through the crisis. So thank you for mentioning that. Innovation-driven will be measured by the value we create for our shareowners. Tweet. And that concludes the call. We are committed to continuing nearly 50 years of stability and growth in the dividends we pay. I just want to clarity on that. So there's an opportunity here on the pricing side to do what we need to do. Carol, just interested in your perspective on the multiyear transformation efforts. You have to have auditors who audit for those products. Before I begin, I would like to thank David Abney, who, after 46 years of service to UPS, passed the baton to me on June 1. Or is it beyond that given these moves you're talking about? We really do appreciate all the thoughtful questions that came to Brian and me today, so thank you for that. We have a year left in that Transformation 1.0 program, so we're on track to deliver. And finally, our healthcare expertise and global portfolio of services enabled us to meet the urgent need for PPE and COVID-19 testing supplies and provide support for vaccine and treatment studies, all of which contributed to our results in each of our three segments. We are operating in a very difficult environment, and we have more work ahead of us to increase profit per piece, which was down 19.3% on a year-over-year basis. Ken Hoexter -- Bank of America Merrill Lynch -- Analyst. So far this year, UPS has distributed $1.8 billion in dividends, which represents a 5.2% increase on a per-share basis over the same period last year. Now, this is virtuous. We wish David all the best. Zacks Equity Research. New Tailwind for Tesla (NASDAQ:TSLA): Have You Bought In Yet? I wanted to just get your perspective on how you're thinking about the growth algorithm for UPS in the U.S. business. So I wanted to ask a little bit more about a follow-up question on the conversation of capital efficiency and specifically, your thoughts on the returns on incremental invested capital. And at the end of the quarter, B2B shipments had climbed to 37% of total U.S. volume. But if I look at our top 20 customers who are retailers, who are predominantly store-based retailers, who, when they're stores closed and demand shifted online -- well, for those customers, they had triple-digit growth in the second quarter. So I think you can look for us to drive improved ROIC. Allison Landry -- Credit Suisse -- Analyst. Thanks. Jordan Alliger of Goldman Sachs. And tax affected, it's about $0.95 of EPS on a cumulative basis. We listened to them. The uptick in e-commerce demand amid the current market uncertainty is likely to have aided UPS' Q2 performance. From a TSR, we're very focused on the cash returns and looking at the annual payback and how long the payback is. The transportation company reported $2.28 EPS for the quarter, beating the consensus estimate of $1.86 by $0.42. As I look at our small and medium-size customer base, we divide it into four big segments, D1 through D4. However, sequential margins improved 580 basis points. Thank you. Chris Wetherbee of Citi. And Carol alluded to it. The … We also had $183 million of interest expense, and lastly, our effective tax rate came in at 25% compared to 23.5% in the second quarter of last year and is higher mainly due to unfavorable changes in our uncertain tax positions. You have to build accountants to account for those products. Operating profit grew 7.4% from last year to $2.3 billion, led by outstanding results in the international segment. Well, just a couple of things. On the expense side, cost per piece declined 8.2% primarily due to lower fuel cost and greater network efficiencies. We have 25 systems or applications in the cloud, another 20 in flight, and more to do. First, our ability to shift air capacity to where it was needed enabled us to meet the strong demand out of Asia using both our own assets and asset-light solutions. Financials 75.9 KB. Thanks very much. ET. But within B2C, could you talk about any mix challenges that you faced in the quarter and how they may have progressed that could have hindered margins there as well? And that's what we're doing with time in transit. It will take some time to get back in toward that trajectory, but there's a base level of capex that we're going to need to spend, call it, $2.5 billion to $3 billion on maintenance, and that's ongoing. Carol, maybe I'll just add on the capex piece. They're in the room with me today, giving me support -- just we're answering your questions. If I look at the profitability of ground resi, which now makes up 44% of our total ground business in the U.S., the profitability was up year on year. If you've got money invested in the stock market, but are confused as to what to do next...This is the can't miss interview of 2020. Historical Financials 40.1 KB. Brian Ossenbeck -- J.P. Morgan -- Analyst. So again, our theme is better, not bigger. Looking to the back half of the year. So it's encouraging signs for how we're managing B2C. Did I hear you say that international will stay at these levels in the second half? It's not ready for prime time. Take credit for that. I think the pace -- we'll give you some more clarity on that when we come out with guidance. And you heard Brian talk about the growth that we saw in that space in the second quarter, up 11%. UPS earnings were twice as strong as consensus, with EPS and sales both unexpectedly rising as the coronavirus fueled an e-commerce surge. We've been promoting people. So margin may not stay at this level. We operationalized what they wanted. UPS earnings in line and revenues beat in Q2; led by international growth Published Fri, Jul 29 2016 12:22 PM EDT Updated Fri, Jul 29 2016 12:28 PM EDT Kate Rooney @Kr00ney Thank you. If you've got money invested in the market – and especially in popular tech stocks – this is critical information for the days ahead... Start Your Risk-Free Trial Subscription Here, 3 Mid-Caps to Have in Your 2021 Portfolio, Trex (NYSE: TREX) is Under-the-Radar Play on Homebuilding Boom, Here’s Where to Get in on Tattooed Chef (NASDAQ: TTCF) Stock. During the quarter, GAAP results included a pre-tax charge of $112 million, equivalent to $0.10 on an earnings per share. Among the positive and negative effects ahead of us, we remain confident in our ability to improve U.S. margins on a long-term basis. Well, Allison, maybe I'll start that. Thank you. The business earned $21.24 billion during the quarter, compared to analyst estimates of $20.08 billion. Our global network is best-in-class, and our people are the hardest working people I've ever met. As we peel that business apart, I think I had mentioned it in my script, but as we extract the SurePost product, it gives us encouraging signs for the underlying pricing health of the business within B2C because pricing, if you exclude SurePost, Carol, and fuel, we were up 1.5%, and that's better than the last three or four quarters. Cumulative Growth of a $10,000 Investment in Stock Advisor, United Parcel Service (UPS) Q2 2020 Earnings Call Transcript @themotleyfool #stocks $UPS, These Were the 3 Best Dividend Stocks of 2020, Why Package Delivery Stocks Will Thrive During a Recession, 3 Big Winners From the Coronavirus Vaccines, Forget Black Friday: This Dividend Stock Could Be the Biggest Winner from Cyber Monday, Copyright, Trademark and Patent Information. Revenue was up 17.3% to $13 billion, driven primarily by ground products. And activity on us, go to our hours. I am extremely proud of the efforts of our people to serve our customers, our communities, and each other. Financials 70.5 KB. Lot of uncertainty in the marketplace, of course, but we thought it was helpful for Brian to kick out some of the expense-related items that we're pretty sure will happen because we're not terribly sure about the demand side. It's an asset-light, outside-service-provider model. Overall, Asia outbound volume grew 46.8% in the quarter and went up by double digits to all major regions of the world. And in the U.S., real GDP and industrial production declined, with unemployment reaching historic highs. In terms of how we're seeing it play out in the next quarter that we're holding at about the June levels, down nine-ish in the month of July as we think about the B2B business. Where that may sit given some of the changes here, particularly year to date? Revenue … These reports, when filed, are available on the UPS Investor Relations website and from the SEC. And with that, I'll turn the call over to Brian. I've led through difficult economic cycles before, and I know the power of making the right decisions to pivot toward opportunity. And Jordan, if I can just add, the B2C growth in Europe in the quarter or in international in the quarter was up 95%.