United Parcel Service, Inc. (NYSE:UPS) Q2 2020 Earnings Conference Call - Final Transcript

Jul 30, 2020 • 08:30 am ET

Previous

United Parcel Service, Inc. (NYSE:UPS) Q2 2020 Earnings Conference Call - Final Transcript

Share
Close

Loading Event

Loading Transcript

Q & A
Operator
Operator

Thank you. We will now conduct the question-and-answer session.

[Operator Instructions]

Our first question will come from the line of David Ross of Stifel. Please go ahead.

Analyst
David Ross

And Carol, you picked a good call to start off with.

Executive
Carol B. Tome

Good morning.

Analyst
David Ross

Wanted to see how you guys are thinking about peak season. In the quarter, you talked about a mini peak or peak-like conditions, where you had some network constraints. If some of that strength continues and then we have on top of that, a holiday surge, how are you talking about it with your customers? What are you thinking about it from a network investment standpoint. Any bottlenecks that may emerge there?

Executive
Carol B. Tome

Yes. Thanks for the question on peak. As a leadership team, we've agreed, we are going to have an outstanding peak season. I participated in my first peak planning committee several weeks after I joined the company and very impressed by how we are planning to manage through, what could be a very peaky season, is about making sure that we've got our network aligned both on the high end and on the low end, because it's uncertain out there. So we're building an optionality, in terms of how we're going to run the network. And then Kate with her team, they're talking to our customers customer-by-customer and how we will best manage through peak.

Operator
Operator

Our next question will come from the line of Scott Group, Wolfe Research. Please go ahead.

Analyst
Scott Group

Hey, thanks and congrats, Carol. So first, if you can just clarify that the second half margin comment is that lower than the second quarter or lower than the full first half. And then just Carol, just bigger picture, I wanted to just get your perspective on how you're thinking about the growth algorithm for USin the US business. So the last few years, it's been volume outpacing revenue and margins falling. Do you think we see more or less volume growth going forward than what we've seen? You've historically talked about 2% to 3% price. Does that meaningfully change? And then I guess, do you think you can -- when do you think you can get back to a double digit margin? I know there's lot there, but any perspective would be great. Thank you.

Executive
Carol B. Tome

Yes. Absolutely happy to share some perspective. As Brian said, it's -- our operating margin in the US domestic business could be lower in the back half of the year than what we reported in the first half of the year. 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. Now longer term, this is where we're very excited about what we're going to do with our company. In my prepared remarks, I've talked about, it's all about being better, not bigger. What do I mean by that? Well, just a