UPS has reported solid first-quarter results driven by its international and non-package businesses, with both segments generating strong revenue growth and record-setting profits.
The U.S. package segment experienced volume declines during the first two months of the quarter, exacerbated by severe winter weather and a difficult economy.
In March, however, and continuing into April, volume trends improved and the company now is experiencing growth in its U.S. package business.
For the quarter ended March 31, 2003, revenue totaled $8.02 billion, up 5.8% from the $7.58 billion reported during the prior-year period. Consolidated operating profit fell 0.2% to $945 million. Net income increased 24.4% to $611 million compared to the prior year's $491 million.
Excluding a $72 million non-recurring charge in 2002 for the adoption of a new accounting standard, net income rose 8.5%, from $563 million in 2002 to $611 million this year.
Earnings per share, adjusted to exclude the non-recurring item, increased 8% to $0.54 versus $0.50 recorded during the prior-year period. Without this adjustment, earnings per share increased 25.6% compared to the $0.43 recorded during the first quarter of 2002.
Operating profit for the international package segment more than quadrupled to $134 million, led by a 10.3% increase in export volume and a 23.5% increase in revenue. Operating profit for the non-package segment almost doubled to $107 million on an 11.4% gain in revenue. The U.S. package segment was hurt by a number of adverse items, including a sharp increase in fuel costs; bad weather that cost the company more than $30 million; and increases in pension and healthcare expenses. Nonetheless, revenue per piece showed excellent improvement as the pricing environment remained firm.
"We are pleased with the quarter on many fronts," said UPS Chief Financial Officer Scott Davis. "We generated good results despite a very challenging domestic environment and were gratified to see our strategy really taking hold in the international and supply chain segments."
The U.S. package segment experienced volume declines during the first two months of the quarter, exacerbated by severe winter weather and a difficult economy.
In March, however, and continuing into April, volume trends improved and the company now is experiencing growth in its U.S. package business.
For the quarter ended March 31, 2003, revenue totaled $8.02 billion, up 5.8% from the $7.58 billion reported during the prior-year period. Consolidated operating profit fell 0.2% to $945 million. Net income increased 24.4% to $611 million compared to the prior year's $491 million.
Excluding a $72 million non-recurring charge in 2002 for the adoption of a new accounting standard, net income rose 8.5%, from $563 million in 2002 to $611 million this year.
Earnings per share, adjusted to exclude the non-recurring item, increased 8% to $0.54 versus $0.50 recorded during the prior-year period. Without this adjustment, earnings per share increased 25.6% compared to the $0.43 recorded during the first quarter of 2002.
Operating profit for the international package segment more than quadrupled to $134 million, led by a 10.3% increase in export volume and a 23.5% increase in revenue. Operating profit for the non-package segment almost doubled to $107 million on an 11.4% gain in revenue. The U.S. package segment was hurt by a number of adverse items, including a sharp increase in fuel costs; bad weather that cost the company more than $30 million; and increases in pension and healthcare expenses. Nonetheless, revenue per piece showed excellent improvement as the pricing environment remained firm.
"We are pleased with the quarter on many fronts," said UPS Chief Financial Officer Scott Davis. "We generated good results despite a very challenging domestic environment and were gratified to see our strategy really taking hold in the international and supply chain segments."
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