Second quarter earnings growth for UPS was solid, the Atlanta-based transportation and logistics titan said earlier today.
Quarterly revenue was up 9.6% annually at $17.5 billion, while earnings per share at $1.71 were up 8.2%, with net income up 7.3% at $1.485 billion.
“UPS is making great progress on our transformation initiatives to enhance profitable growth and improve operating leverage,” said David Abney, UPS Chairman and CEO, in a statement. “We are confident that our strategies will position the company to provide improved value for customers and shareowners.”
Individual segment result for Q2:
- U.S. domestic package revenue increased 6.3% to $10.4 billion, with operating profit at $939 million, down from $1.255 billion a year ago. Average daily shipments were up 3.1% to 16 million, with Next Day Air up 2% at 1.4 million, Deferred down 2.2% at 1.2 million, and Ground up 3.1% at 13.4 billion. Revenue per package was up 3.6% at $10.07, with Next Day Air up 2.4% at $20.08, Deferred up 8.2% at $13.76, and Ground up 3.6% at $8.67. UPS said that this segment was paced by e-commerce demand and higher revenue per piece;
- International Package revenue headed up 13.6% to $3.6 billion, which UPS said marked its 14th straight quarter of currency-neutral double-digit operating profit growth, and its highest second quarter operating profit, which was up 7.8% at $618 million. Domestic international package average revenue per piece was up 10% at $6.61, with export average piece per package revenue up 3.4% at $30.14; and
- Supply Chain and Freight revenue was up 16.1% annually at $3.5 billion, and operating profit was flat at $2.036 billion. LTL revenue was up 13% at $853 million, due to increases in pricing and tonnage, and LTL revenue per hundredweight was up 7.4% at $25.36. Total quarterly shipments were flat at 2.464 million, and shipments per day at 41,200 were also flat.
Jerry Hempstead, president of Hemsptead Consulting, said that these strong quarterly results were largely driven by pricing gains through the company's general rate increase (GRI), which was issued last December.
“The message here, as with FedEx, is that the GRI is sticking each quarter (as long as package count is expanding),” he said.