Package delivery company UPS has pre-announced a 37% increase in adjusted diluted earnings per share for the first quarter of 2010. The company attributes the favorable results to a significant acceleration in the international package and supply chain businesses and improved operating margins.
Adjusted first quarter earnings totaled $0.71 per diluted share compared to an adjusted $0.52 in the prior-year quarter. On a reported basis, diluted earnings per share were $0.53 compared to $0.40 for the prior-year period, an improvement of 33%.
Consolidated revenue for the period grew 7%, driven by increases of 18% in international package and 14% in supply chain and freight. International daily volumes grew significantly with export up more than 9% and non-U.S. domestic up over 24%. U.S. domestic daily volume increased less than 1%, the first year-over-year growth in more than two years.
“We expected the first quarter to be the most challenging of 2010 as the economic recovery gathered steam through the year,” says Kurt Kuehn, UPS’s chief financial officer. “As it turned out, revenue was stronger than we expected due to international volume gains, increased yields in the U.S. and growth in forwarding and logistics. Also, the operating leverage in our streamlined network provided higher margins than anticipated.”
As a result of the strong earnings for the first quarter and an improved outlook for the remainder of the year, UPS has increased its expectations for full-year adjusted diluted earnings to a range of $3.05 to $3.30 per share, a significant increase over the $2.70 to $3.05 provided in February.
Despite the favorable results, UPS gave no indication that it planned to hire back any of the 1,800 employees it said it would lay off earlier this year.