UPS’ 2Q Profit Improves, Excluding Pension Charge
UPS Inc.’s second-quarter profit improved 4.5% to $1.12 billion, excluding a one-time pension charge, driven by revenue growth in all of its shipping segments.
Net income including the charge was $454 million, compared with $1.07 billion in last year’s second quarter.
The company also lowered its full-year per share forecast, to $4.90 to $5 per share, up 7% to 9% from last year’s results but down from a previously forecast $5.05 to $5.30 a share.
On a per-share basis, income was $1.21 per share excluding the charge, and 49 cents including it. Revenue rose 5.6% to $14.3 billion.
The company’s $1.07 billion pre-tax charge ($665 million after tax) in the quarter was related to the transfer of post-retirement benefit obligations to multiemployer healthcare plans for certain employees employed under the Teamsters National Master Agreement.
Revenue at the less-than-truckload unit, UPS Freight, rose 5.5%, driven by a 4.1% increase in LTL revenue per hundredweight and tonnage gains of 1.6%.
Domestic package revenue rose 5.2% to $8.7 billion, with daily package volume up 7.4%, led by gains in UPS Ground and Deferred, which rose 8.1% and 5.4%.
International small-package revenue gained 6.2% to $3.3 billion, led by strong growth in export shipments.
UPS said it will spend $175 million on improving its shipping during the holiday season from Thanksgiving through Christmas, including expanding its route-optimization software.
Last year, bad weather and a last-minute surge in online orders caused the company to miss some holiday deliveries around Christmas.
“2014 is the year of investing for the customer,” Chairman and CEO Scott Davis said in a statement. “We are providing new capabilities and expanding capacity to ensure UPS meets the rapidly growing needs of the marketplace.”
