UPS Gains in Second Quarter Profits, Its Stock Price Falls

While global small package growth continued, margins on international package shipments were lower than had been expected, standing at 18.5% as opposed to last year’s 19.9% operating margin. In fact, global small package volume rose 6% with 841,000 additional packages per day, year over year. But up is certainly better than down and UPS showed consolidated revenues up 15% to $11.74 billion, with operating profits of $1.70 billion.

Looking ahead, UPS cut its third quarter estimates. There are fewer operating days in this year’s third quarter when compared to the same period last year.

The initial reaction of the stock market was a sharp drop in the price of a share of UPS. At the start of the day’s trading when quarterly results were announced, shares fell from $80 to $73.

As for the second quarter, the company reports that all levels of service posted gains. Daily ground volume was up 4.6%, Next Day Air climbed 4.2% and deferred air volume rose by 7.6%.

Supply Chain and Freight operations were at $2.04 billion for the quarter, compared to last year’s $1.25 billion. Operating profits for the operations were $47 million, up over a year ago’s $34 million. However the operating margin was 2.3% this year. Last year’s margin was 2.7%.

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