UPS Profits Rise 1% to $1.27 Billion in Third Quarter
UPS Inc. boosted third-quarter net income by 1% to $1.27 billion, or $1.44 per share, helped by stronger profits in international business.
UPS, which ranks No. 1 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers, improved revenue 4.9% to $14.9 billion. Earnings in last year’s second quarter were $1.26 billion, or $1.39 per share.
Domestic package revenue rose 4.8% to $9.3 billion, but profits before interest and taxes fell 0.5% to $1.3 billion. Package volume increased 5.7% with growth in expedited, deferred and ground services. UPS said strong e-commerce growth continued in the third quarter, while business-to-business grew primarily due to online retail returns.
International package increased profits 14% to $576 million year-over-year, which UPS said was a record for any third quarter in company history. Revenue rose 2.2% to $3 billion, helped by export volume increasing 7.1% on strong gains out of Asia and shipments within Europe.
Supply chain and freight business profits fell 5.9% to $206 million, hurt by the weak freight market. Revenue was up 8.1% to $2.61 billion, mostly due to the Coyote Logistics acquisition a little more than one year ago.
UPS Freight revenue dropped 5.3% to $701 million, down $39 million from one year ago. Revenue per hundredweight in the less-than-truckload unit increased 3.7% over the same period last year. But shipments per day were down 5.2% and tonnage fell 5.9%.
“Market conditions in international airfreight and the U.S. truckload brokerage industries remain soft,” the company said. “The forwarding business experienced tonnage growth in the Ocean [Freight] and North American Air Freight products, partially offsetting the decline in International Air Freight tonnage.”
The company added it is optimistic heading into the fourth quarter and projecting an increase of more than 14% above the holiday season in 2015, mainly due to two additional delivery days this year. UPS expects to surpass 700 million packages delivered globally in the days between Thanksgiving and New Year’s Eve. It expects the busiest day will be Monday Dec. 19 with last minute shoppers buying items online.
UPS earnings matched the consensus of analysts, according to a Bloomberg News survey.
