UPS reveals ‘solid’ third-quarter results

UPS saw revenues rise by 7% in the third quarter reach $16bn, while international operating profit increased by 8.9% to $627m.
Operating profit as a whole at the US based parcels and logistics giant stayed pretty much static at $2bn.
The Supply Chain & Freight part of the business enjoyed a 13% year on year improvement in revenue, with profits up by 9.7% to $226m.
“UPS produced another solid quarter of financial performance, despite the impact of several natural disasters that slowed regional economic activity and damaged infrastructure,” remarked David Abney, UPS chairman and chief executive.
“Our business segments adapted quickly to changing conditions this quarter, taking advantage of market opportunities while minimising cost and service disruptions from recent events.”
The Supply Chain and Freight segment of the business produced record third-quarter results, with double-digit revenue growth and near double-digit operating profit growth.
According to the express services giant: “Performance results were driven by revenue-quality improvements combined with structural cost-reduction programs.” 
Revenue increased by 13% over the July to September period of last year in the Supply Chain & Freight segment, partly as a result “of deeper alignment with preferred customers, strengthened revenue management initiatives and improved market conditions”.
There were gains in Freight Forwarding, UPS Freight and Coyote Logistics volumes, all of which also contributed to the impressive financial.
UPS Freight increased its LTL (less-than-truckload) revenue by 9.3% on tonnage growth of 5.5%. Increased customer demand from the retail and aerospace sectors drove UPS’s Distribution unit’s revenue and operating profit higher.
The Domestic segment of the business benefited from strong online retail demand for both UPS Next Day Air and Ground services, which drove a 3.9% increase in revenue over the third quarter of 2016 for this part of the business, reaching $360m.
In that Domestic segment, Next Day Air daily shipments were up by 8.0% year on year, but Deferred Air daily shipments were down slightly when compared to the strong prior-year growth of more than 10%.
Meanwhile: “Our International segment continued its track record as a growth engine, generating strong top-line and operating-profit growth driven by robust demand for UPS solutions,” Abney stated.
The International segment of the UPS business produced a record third-quarter operating profit of $627m, up 8.9%, as the result of what UPS called “broad, accelerated growth” combined with improved yields.
The quarter was also marked by regulatory approval of a UPS joint venture with SF Express, a small-package carrier in China. 
“UPS third-quarter results highlight the flexibility of our business”, commented Richard Peretz, UPS’ chief financial officer.
“Our recent performance gives us confidence moving forward as we adapt to evolving, global e-commerce strategies with increased seasonality. 
“We are executing well on our plans, have a positive outlook for peak and as a result, we are moving higher in our original guidance range,” Peretz added.
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