Trucking and parcel delivery giant UPS reported a huge increase in its second quarter profit – 170% – despite a slight drop in revenue.
Evan Lockridge・Former Business Contributing Editor
July 28, 2015
2 min to read
Trucking and parcel delivery giant UPS Inc. (UPS) Tuesday reported a huge increase in its second quarter profit despite a slight drop in revenue.
Net income totaled $1.23 billion compared to $454 million during the second quarter of 2014, or diluted earnings per share of $1.35 versus 49 cents a year earlier.
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Second quarter revenue fell 1.2% to $14.1 billion, which the Georgia-based company attributed to currency exchange rates and lower fuel surcharges.
During the quarter, UPS said, it expanded capacity and launched new capabilities "that provide higher value to customers,” said David Abney, UPS CEO. “The strong momentum in our International segment is expected to continue and gives us confidence in achieving the upper end of our guidance range.”
In the company’s supply chain and freight business, overall revenue fell 4.5% to $2.2 billion, due to forwarding revenue management initiatives, currency and lower fuel surcharges at UPS Freight, according to the company.
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Operating profit improved $31 million, or 18% over the adjusted results for the same quarter 2014.
UPS Freight revenue declined 2.5% due to lower fuel surcharges and a drop in tonnage driven by changes in customer mix and slowing market growth. Less-than-truckload revenue per hundredweight growth remained positive, with a 1.4% gain.
U.S. domestic package revenue increased $140 million over the second quarter last year to $8.8 billion. Total daily deliveries grew 1.8% due to a slower pace of business-to-consumer growth.
Operating profit was $1.2 billion, up 3% over prior-year adjusted results.
In UPS’ international package business, operating profit increased $81 million, or 17% over the adjusted results for the same period in 2014.
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“The second quarter results reflect continuing gains in our international business,” said Richard Peretz, UPS chief financial officer. “Even though the U.S. economy appears to be growing at a slower pace, our global portfolio and performance reinforces our expectations to attain the higher-end of the guidance range.”
The company’s guidance for 2015 full-year diluted earnings per share is $5.05 to $5.30, a 6% to 12% increase over adjusted 2014 results.
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