Two of the biggest names in trucking, one in the shipping business and the other in the manufacturing sector, reported their fourth quarter 2017 and full-year earnings on Thursday morning and both showed big gains.
Parcel delivery and trucking company UPS Inc. reported it moved back into the black in the fourth quarter of 2017 while reporting a bigger profit for all of last year.
Net income during the final three months of 2017 totaled $1.1 billion, or $1.27 per share, compared to a net loss a year earlier of $239 million, or 27 cents per share.
The company reported that fourth quarter 2017 net profit was partially boosted by $258 million, or 30 cents per share, in tax savings due to the federal tax reform bill passed and signed into law in December. The results were also affected by an $800 million pre-tax pension charge.
Revenue in the most recent quarter totaled $18.8 billion versus $16.9 billion for the fourth quarter of 2016.
For all of 2017, UPS said net income improved 43.1% from 2016 to $4.9 billion as total revenue increased 8.2% to $65.9 billion.
“We made significant progress on key capacity investments in 2017. Our momentum, transformative actions, and the economic catalyst from the Tax Cuts and Jobs Act position UPS for growth in 2018 and beyond,” said David Abney, UPS chairman and CEO.
The company’s supply chain and freight segment produced record full-year and fourth-quarter results with a 21% hike in revenue, which totaled $3.2 billion for the fourth quarter of 2017. Operating profit was $142 million compared to an operating loss of $139 million a year earlier. Tonnage gains in freight forwarding, UPS Freight, and Coyote Logistics contributed to improved top-line results, according to the company.
Revenue at its core domestic package service rose 8.4% to $11.84 billion in the most recent quarter on higher demand from online purchases while it reported operating profit of $627 million compared to an operating loss of $570 million a year earlier.
UPS noted that domestic package shipments surged beyond network capacity during “cyber-periods,” driving additional operating cost of $125 million.
Daimler Sets New Records For 2017
Meantime, the parent company to such truck brands as Freightlinerr and Western Star, said it posted record results in terms of unit sales, revenue, and net profit.
Germany’s Daimler AG reported record net profit for all of 2017, totaling 10.9 billion euros, equivalent to $13.5 billion, according to AP, marking a 24% improvement over 2016. Accordingly, earnings per share increased to 9.84 euros from 7.97 euros a year earlier. Revenue for 2017 improved 7% from the year before, totaling 164.3 billion euros.
For the fourth quarter of 2017, net profit climbed 49% to 3.3 billion euros while revenue moved up 6% to 43.6 billion euros.
“We have strengthened our core business and created an excellent starting position to master the challenges of the fundamental transformation of the automotive industry that lie ahead of us,” said Bodo Uebber, member of the board of management of Daimler AG responsible for Finance and Controlling and Daimler Financial Services.
Daimler said it increased its total unit sales in 2017 by 9% to 3.3 million vehicles, surpassing its growth target. The Mercedes-Benz Cars and Mercedes-Benz Vans divisions exceeded the forecasts made at the beginning of the year by recording growth of 8% and 12%, respectively.
Daimler Trucks also posted a significant increase of 13% in unit sales. At the beginning of the year, the division had anticipated unit sales similar to those of the previous year. The sales forecast was adjusted as a result of more favorable market developments in some important markets, according to the company. Unit sales at Daimler Buses were also significantly higher than in the prior year, moving up 9%.
Looking ahead, the company said “due to the continuation of a positive investment climate worldwide, demand for medium- and heavy-duty trucks should increase significantly in most of the relevant regions. In the NAFTA region, a cyclical recovery of the truck market is to be expected and Daimler anticipates a significant increase in overall sales in weight Classes 6-8.”
For the company overall, Daimler said that while growth in unit sales and revenue will have a positive impact on the development of earnings, it expects to spend more money to develop technologies that will dampen earnings and will be on "the magnitude of the previous year" rather than increasing.