Rising demand for next-day air services boosts UPS net earnings by 14pc
EXPRESS firm UPS reported a 3
EXPRESS firm UPS reported a 3.4 per cent year-on-year increase in revenues to US$18 billion during the second quarter of the year, while net income surged 13.5 per cent to $1.5 billion on the back of increasing demand for next-day air services.
UPS said that the improved results came on the back of a 7 per cent increase in its US daily volumes while next-day air service demand improved by more than 30 per cent.
'Our Transformation initiatives are generating greater efficiencies across the network and, when combined with our growth strategies, UPS achieved profit growth in all segments,' said David Abney, UPS chairman and chief executive.
'We also announced a very extensive roll-out of new products and services such as UPS My Choice for Business, expanded UPS Access Points, and UPS Worldwide Economy, among others, for small- and medium-sized businesses, all designed to generate additional profitable growth.'
UPS' US Domestic business segment posted a 7.7 per cent year-on-year increase in second-quarter revenues to $11.1 billion and operating profit was up 28.6 per cent to $1.2 billion.
'Demand for faster delivery is a structural change in our industry,' said Mr Abney.
'Anticipating this change, our additional air capacity and modernised network enabled this growth to have a positive impact on profitability and positions UPS well to serve the growing needs of the market.'
Both B2B and B2C shipments grew within the period. UPS' International segment saw revenues decrease by 2.7 per cent to $3 billion but operating profits improved to $663 million from 618 million, according to London's Air Cargo News.
The company's Supply Chain and Freight segment noted a 3 per cent decline in second quarter revenues to $3.4 billion and a 25.9 per cent increase in operating profits to $272 million.
The airfreight business achieved 'robust profit growth' driven by 'expanded buy/sell' spreads.
'UPS grew profits across all business segments,' said Richard Peretz, UPS's chief financial officer.
'Our performance was driven by the efficiencies created by investments in our network, the success of ongoing initiatives and our ability to execute in an ever-changing environment. We expect to carry this momentum through the upcoming quarters.'