Siddharth Cavale

(Reuters). -Logistics giant United Parcel Service Inc (NYSE 🙂 expects 2022 revenues above market estimates and has increased its dividend. Tuesday’s record quarterly earnings were supported by higher shipping costs and more lucrative e-commerce clients.

Before the bell, shares in Atlanta’s company shot up 7% to $216.40.

Carol Tome has been named the chief executive officer of the largest parcel delivery company in the world. She believes that “better is not better” and prioritizes profitable deliveries over quantity.

UPS has been competing for contracts with more healthcare companies, small and medium-sized business and not large clients which can generate lower profits.

This resulted in UPS’s 2021 adjusted operating margins increasing to 13.5%, from 11.5% during the similar pandemic-hit time period in 2020 when Tome assumed CEO. According to UPS, Tuesday’s announcement was made one year early than originally expected. The number would reach 13.7% in 2022.

UPS achieved a better on-time performance than FedEx’s (NYSE:) of 85.7% during this holiday season according to ShipMatrix data viewed by UBS analysts.

Helane Becker, Cowen analyst said that UPS ended 2018 with high volumes and strong momentum going into 2022. He also noted that Cowen expects strong demand due to sustained online shopping.

Analysts predict that freight costs will continue to rise this year, as international shipping companies try to circumvent pandemic restrictions as well as tight labor markets.

FedEx has suspended all domestic express freight services for its employees in the face of an Omicron-induced surge in COVID-19 instances.

UPS expects 2022 revenues of $102 billion. This is higher than the Refinitiv IBES estimate at $100 billion. UPS increased its quarterly dividend 49%, to $1.52 per Share.

The revenue jumped by 11.5%, to $27.77 Billion in the three months ended Dec. 31, while the average piece of revenue increased by 11.3%