Atlanta-based United Parcel Service (UPS) said it generated fourth-quarter 2015 adjusted diluted earnings per share (EPS) of US$1.57, a 26% increase over adjusted fourth-quarter 2014 results and its highest ever EPS for the fourth quarter.
All three business segments—domestic package, international package, and supply chain and freight—expanded operating margins and generated double-digit operating profit growth during the period, the logistics giant said.
For the full year, UPS said it achieved an all-time-high adjusted diluted EPS of $5.43, an increase of 14% over 2014 adjusted results.
Total revenue in the fourth quarter rose slightly to $16.1 billion, growth slowed by currency translations and lower fuel surcharges.
“Our flexible integrated network, close collaboration with customers and the extraordinary efforts of UPSers enabled us to achieve great service and record financial performance this quarter,” said David Abney, UPS chief executive officer.
UPS delivered 1.3 billion packages during the fourth quarter, an increase of 1.8% over the same period last year. For calendar year 2015, the company delivered 4.7 billion packages, up 2.1% over 2014. During the peak season last year, UPS delivered 612 million packages.
By segment, U.S. domestic revenue increased 2.6% to $10.3 billion. Lower fuel surcharge rates reduced revenue growth, even as strong demand from e-commerce shippers contributed to a 2.4% increase in average daily shipments.
“UPS completed deliveries to more than 1.9 million new addresses during December, demonstrating the growing influence of online retail,” said the company.
Adjusted operating profit increased $209 million, or more than 18% over the fourth-quarter 2014 adjusted results.
For international package delivery, adjusted operating profit was up 16% to $624 million in the fourth quarter, led by strong performance in Europe. For the first time, this segment surpassed $2 billion in annual adjusted operating profit.
On a currency-neutral basis, revenue per package was down 0.9% compared to the fourth quarter of 2014. Lower fuel surcharge eclipsed revenue per package growth and offset strong growth in base rates.
Export shipments increased slightly, led by mid-single digit growth in the Europe and Americas regions. Growth in Europe trans-border products and exports to the U.S. offset a drop in U.S. and Asia exports.
Supply chain & freight, meanwhile, recorded an adjusted operating profit increase of 11% to $199 million over adjusted 2014 fourth-quarter results. Total segment revenue increased 6% to $2.6 billion. The inclusion of Coyote Logistics revenue for the full quarter more than offset the impact of softer markets, lower fuel surcharges, and revenue improvement efforts in the other business units.
Freight forwarding generated increased operating profit and margin expansion despite declines in tonnage. UPS freight less-than-containerload revenue per hundredweight increased 2.1%. Lower fuel surcharges slowed the growth rate, and the improvement was offset by a 12% tonnage decline that lowered revenue.
“This was the fourth consecutive quarter that UPS exceeded our financial expectations,” said chief financial officer Richard Peretz. “Our business generated strong results in 2015. While we face uncertain macro-economic conditions, we are continuing to invest for profitable growth.”
Looking ahead, Peretz said the company’s guidance for 2016 full-year diluted EPS is $5.70 to $5.90, an increase of 5% to 9% over adjusted 2015 results.
Photo: MobiusDaXter
