Global supply chain company United Parcel Service (UPS) announced earnings per share (EPS) of US$1.58 for the second quarter of 2017, an increase of 11% versus the same period in 2016 owing to higher revenue.
All three business segments generated a more profitable product mix, improved yields, and better management of operating costs, said the Atlanta-based company in a release.
“UPS generated great year-over-year revenue gains in the second quarter and we produced solid earnings per share growth, consistent with our plans,” said David Abney, UPS chairman and CEO. “We continue to invest in our network to expand our capabilities, our market presence and our global reach.”
In the second quarter, total company revenue increased 7.7%, as all segments and major product categories posted growth on the back of expanded customer demand.
Operating profit was up 8.7% to $2.2 billion, driven by strong performance in the U.S. domestic market and supply chain and freight segment.
The domestic segment benefitted from growing demand for e-commerce deliveries, which fueled an 8.1% increase in revenue over 2Q 2016, said UPS.
The international segment generated solid top-line improvement with increased demand for cross-border shipments. Export shipments grew 12% with gains from all international regions.
Operating margin for the international segment was industry leading at 18.4%, and operating profit was $583 million, including anticipated currency headwinds of $114 million.
The segment reported a revenue increase of 2.8% over 2Q 2016, up 8.3% on a currency-neutral basis.
As for the supply chain and freight segment, “it again showed good momentum this quarter as the teams in each business unit are executing on revenue quality improvements combined with structural cost reduction programs,” Abney said. “This performance shows balanced improvement across all business units as revenue and operating cost initiatives strengthen core performance.”
Revenue from supply chain and freight increased 12% over 2Q 2016 as the company deeply aligned with preferred customers, strengthened revenue management initiatives, and market conditions improved across all business units, said the release.
Tonnage gains in freight forwarding and UPS Freight contributed to improved top-line results as economic conditions across non-retail markets continue to strengthen.
On the company’s prospects in the months ahead, “second quarter results were in line with our expectations and we are pleased with the progress on our strategic initiatives,” said Richard Peretz, UPS chief financial officer. “Looking at the second half of the year, our core business performance will continue to produce solid results.”
UPS reaffirmed its 2017 adjusted diluted EPS guidance to be between $5.80 and $6.10, which includes about $400 million, or $0.30 per share of pre-tax currency headwinds.
Photo courtesy of UPS
