Saturday, April 29, 2017

UPS posts $1.2 billion 1Q net profit as B2C and B2B deliveries rise

United Parcel Service (UPS) posted a $1.2 billion net profit for the first quarter of 2017, up 2.4% from net income of $1.1 billion in 1Q 2016, on a 6.2% year-over-year rise in total company revenue to $15.3 billion.

First-quarter revenue from UPS’s domestic package business rose 5% year-over-year (YOY) to $9.5 billion, with next day air revenue up 5.7% to $1.7 billion. International package revenue increased 4.9% YOY to $3.1 billion. Total fuel expenses were up 43% YOY to $621 million.

UPS said its revenue per piece increased across all products in its US domestic segment, up 2.4% in total, as the company benefited from previously implemented price increases. Total domestic revenue was up $451 million YOY in the 2017 first quarter as business to consumer (B2C) deliveries rose. UPS said its Next Day Air and deferred air shipments were up 3.9% and 4.1%, respectively, compared to 1Q 2016. The company said construction is underway on 17 new facility projects, adding over 5 million square feet of capacity to support further B2C and B2B (business-to-business) growth.

International package operating profit was down 7.8% in the first quarter, to $529 million. UPS’s US domestic package operating profit also declined YOY, down 2.4% to $1.1 billion.

“Revenue came in strong this quarter with all segments adding to the topline,” UPS chairman and CEO David Abney said. “[Our] customers are benefiting from expanded capacity, choice and improved time-in-transit.”

“Our current momentum, combined with accelerated investment initiatives gives us confidence in our ability to attain our full-year guidance,” UPS CFO Richard Peretz said.

The company reaffirmed its 2017 adjusted EPS guidance to be between $5.80 and $6.10., which included over $400 million, or 30 cents per-share, of pre-tax currency headwinds.

(Mark Nensel - ATWOnline News)

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