UPS has attributed its better-than-expected results to the reorganisation of its US domestic operations and significant growth in the company's international business.
UPS reported a consolidated Q2 operating profit of $1.4 billion on revenues of $12.2 billion.
Operating profit was up 56.42% (Q2 2009: $895m) and revenues up 12.96% (Q2 2009: $10.8bn).
Overall, the average volume per day was up 10.49% to 14.8 million packages.
US Domestic Package
- Total package volume was up 1.2% in the second quarter
- Operating profit rose 57.14% to $748 million (Q2 2009: $476m)
- Revenue was up 7.07% to $7.27 billion (Q2 2009: $6.79bn)
International Package
- Average daily volume rose 19.78%
- Operating profit rose 77.82% to $521 million (Q2 2009: $293m)
- Revenue was up 23.11% to $2.77 billion (Q2 2009: $2.25bn)
- Export volume increased by 15%, outpacing the market due to strong growth in all regions - with Asia leading the way, up more than 40%
- Non-US domestic volume increased by 24%, driven by an acquisition in Turkey in the third quarter of last year as well as 13% organic growth, powered by strength in core European countries and Canada
- During the quarter, UPS announced new alliances with its local service partners in Malaysia and Vietnam - agreements that will provide greater access to UPS's portfolio of services and global network for customers in these emerging markets
Supply Chain & Freight
- Each business unit in the segment improved profitability - led by Forwarding with tonnage growth exceeding 30%.However, margin expansion was limited due to capacity constraints in the global airfreight market
- UPS Freight revenue grew 10% over last year, driven by improved yield and higher weight per shipment, and the business unit returned to profitability in the second quarter
- Operating profit was up 5.56% to $133 million (Q2 2009: $126m)
- Revenue rose 20.67% to $2.16 billion (Q2 2009: $1.79bn)
Outlook
Chief financial officer Kurt Kuehn commented: "We experienced strong revenue growth across the board, with substantial margin expansion in our U.S. and International segments."
He added that, despite the anticipated slow pace of the US recovery and a cautious outlook for Europe, UPS is confident in its ability to expand the business and improve profits.
