Revenues and income increase at UPS in Q2

UPS saw revenues and net income increase during the second quarter of the year, while operating profit for the period came under pressure as a result of pension expenses.
The express giant reported a 9.6% increase in total revenues for the second quarter to $17.4bn, operating profits declined by 13% to $1.8bn and net income was up by 7.3% to $1.5bn.
UPS said its operating profits were affected by planned increases in pension expense and cost for ongoing network projects, while revenues were driven by international package and supply chain and freight.
Its US domestic segment recorded second-quarter revenue growth of 6.3% to $10.3bn while operating profits were down, due to the pension expenses, by 25.2% to $939m.
The segmented benefitted from increased e-commerce demand and growth in revenues per item on higher base rates and fuel surcharges.
The international package segment registered a 13.6% increase in second-quarter revenues to $3.6bn and operating profits were up by 8.4% $618m.
UPS said daily export shipments were up by 9.5% led by strong growth in Europe and the US.
Finally, its supply chain and freight business saw revenues for the period increase by 16.1% to $3.5bn and operating profits were up by 1.9% to $216m.
UPS said the forwarding business led all units with 23% revenue growth, as revenue management initiatives drove top-line improvement. UPS Freight revenue increased 13% on higher pricing and tonnage gains.
“The Supply Chain and Freight segment delivered another quarter of double-digit growth in revenue and adjusted operating profit,” said David Abney, UPS chairman and chief executive.  “Our targeted growth strategies and improved efficiencies produced the segment’s best profit growth in its history.”
“UPS is making great progress on our transformation initiatives to enhance profitable growth and improve operating leverage.
“We are confident that our strategies will position the company to provide improved value for customers and shareowners.” 

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