UPS enjoys successful first quarter, but airfreight market challenging
28 / 04 / 2016
UPS has revealed what it describes as record first quarter results. Total revenue over the three-month period reached $14.4 billion, up 3.2% over the same quarter of last year (and on a currency-neutral basis, revenue increased 3.7% year on year).
Both UPS’s domestic US and international small package segments drove growth
“We continue to execute well in all areas of our long-term enterprise strategy,” enthused David Abney, UPS chairman and CEO.
“The combination of revenue growth and benefits from our accelerated investments generated strong financial results in the quarter.”
UPS’s Supply Chain and Freight division enjoyed a revenue increase of more than 10% year on year, turnover reaching $2.4 billion. The growth was, the company said, mainly due to the acquisition of Coyote Logistics – a Chicago-headquartered, non-asset based truckload freight brokerage firm – in the third quarter of last year.
Operating profit in Supply Chain and Freight was better than anticipated, but slightly less than last year.
Moreover, weak market conditions in both the airfreight forwarding and less-than-truckload (LTL) markets were said to have “weighed on top line growth”.
UPS’s forwarding business grew its operating margin through what the company said had been a “focus on revenue quality and operating cost reductions”
“Revenue management actions and improved network efficiencies are driving substantial operating profit growth,” Richard Peretz, UPS’s chief financial officer, outlines.
“We expect this momentum to continue.”
UPS is the world’s largest package delivery company, a leader in the US less-than-truckload industry and a major player in the provision of supply chain management solutions. Like the other integrators, it ships across a highly integrated network by land, sea and air.