Global shipments help drive UPS profits

UPS, the world’s largest package delivery company, increased net profits by more than 10 per cent in the first quarter, driven by expansion in international shipments.

There was also solid growth in the US, following a series of measures last year to make the mature domestic business more efficient and competitive.

“This was a quarter of outstanding growth that resulted in strong returns and excellent cash flow,” said Mike Eskew, UPS chief executive.

Net profits were $975m, or 89 cents a share, compared to $882m, or 78 cents a share, in the same period last year.

The earnings exceeded Wall Street’s consensus expectation of 88 cents a share.

Revenues grew by 16.5 per cent to $11.5bn.

UPS and rivals such as FedEx and DHL have been growing strongly over the past few years as international trade expands.

The global shift towards efficient just-in-time supply chains has also increased demand for speedy and reliable delivery services.

UPS said its 9 per cent increase in global small package volume outpaced market growth.

International package volume was up 29 per cent, while domestic volume rose by 6.8 per cent.

Much of the international growth came in Asia, where UPS has been investing heavily in its Chinese operations.

Revenues from supply chain and freight services were up nearly 54 per cent following the acquisition of Overnite, a domestic truck company.

UPS has made a series of acquisitions in freight and logistics businesses as it seeks to expand into a broader range of supply chain services.

Scott Davis, chief financial officer, reaffirmed the company’s target to increase earnings per share by 11-16 per cent this year.