Double-digit six for UPS

As reported by Post & Parcel:

UPS has reported that its international operating profit increased 11% to $613m in the second quarter (Q2), representing the sixth consecutive quarter of double-digit growth.

Total revenue for the quarter was $14.6bn, up 3.8% on last year – and UPS said that growth could have been greater, but for changes in fuel surcharges and currency exchange rates. On a currency-neutral basis, revenue increased 4.0. Lower fuel surcharge rates reduced revenue growth by approximately 120 basis points.

“We are investing to expand our global network, implementing new technologies and capturing new revenue in high-growth markets,” said David Abney, UPS chairman and CEO. ”These strategic investments in our diversified business again this quarter generated strong value for our customers and shareowners.”

In the US domestic package sector, the company’s operating profit increased to $1.2bn and total revenue was up 2.4% at $9bn. Average daily package volume increased 2.5%, with Next Day Air up 5.6% and Ground products up 2.4%. UPS added: “Strong business-to-consumer (B2C) growth trends continued this quarter, outpacing business delivery growth more than five to one.”

In the international package sector, operating profit jumped more than 11% to $613m – which was a Q2 record for UPS – and revenue was up 1.1%.

“Daily Export packages increased 3.9%, as growth out of Europe and Asia offset lower US levels,” said UPS. “The Europe-to-US trade lane increased at a double-digit pace, as customers used the UPS network to benefit from the strength of the US dollar.”

UPS Supply Chain and Freight revenue increased by more than 13% to $2.5bn – which the company said was mainly attributable to the acquisition of Coyote Logistics in the third quarter of last year.

Richard Peretz, UPS chief financial officer, offered this outlook summary: “UPS produced solid second quarter results, despite the continued uncertainty in the macro economy. The technology and productivity investments in our integrated network are delivering strong results. We reaffirm our guidance for 2016 full-year diluted earnings per share of $5.70 to $5.90.”

Ken Wood is the founder of LJM Consultants. LJM helps clients negotiate “Best in Class” UPS/FedEx agreements. LJM was recently named the “best parcel auditing company in America” and was also inducted into Inc. Magazine’s Top 500/5000 fastest growing companies in America for 2013. To learn how LJM Consultants can help your company get the parcel contract you deserve, call 631-844-9500 or email kenwood@myLJM.com.