UPS Earnings Buoyed by Intenational Shipments

July 25, 2007
UPS Supply Chain and Freight revenues were $2.11 billion for the quarter, compared to 2006 figures of $2.04 billion. Operating profits were $98 million

UPS Supply Chain and Freight revenues were $2.11 billion for the quarter, compared to 2006 figures of $2.04 billion. Operating profits were $98 million against last year's $47 million and margins were up to 4.6% this year, 2.3% last year. The company attributes some of the gain in UPS Freight activities to updated customer service and technology systems.

"The company's total performance reflects the benefits of our truly global network," says Mike Eskew, UPS chairman and CEO. "Strong gains in our international package segment offset a lack of growth in the US business. We're also executing well in our supply chain and freight business and are pleased with the profit improvements in this segment.”

As far as its international package business, UPS had revenues of $2.50 billion for the quarter. Last year's revenues for the same period were $2.23 billion. Profit was $475 million this year; $414 million last year. Margins were 19.0% for second quarter 2007, and 18.5% in 2006. Significantly, average daily volumes climbed to 1.80 million from 1.72 million last year.

Average daily volumes for US Domestic Packages declined to 13.23 million in 2007, compared to 13.25 million in 2006. However, revenues were higher in second quarter 2007, at $7.58 billion. They were $7.46 billion last year. Profits for the company segment were down at $1.19 billion from 2006's $1.23 billion and margins were 15.7% for the quarter in 2007, 16.5% in 2006.

Looking forward, Scott Davis, UPS vice chairman and CFO, says, "Toward the end of the year, we expect the small package market to more closely correlate to U.S. economic trends and as a result, we should see gradual volume growth in our US package business."

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