UPS volume grows in third quarter, 1,200 jobs to be eliminated

United Parcel Service Inc. has credited a 5 percent spike in global small package volume for its increase in net income in the third quarter.

Atlanta-based UPS (NYSE: UPS) also announced a new five-year partnership with the Italian Post to deliver the Italian post office’s international express volume. Financial terms were not disclosed.

For the third quarter, UPS had net income of USD1.04 billion on USD11.7 billion in revenue, compared with net income of USD953 million on USD10.6 billion in revenue in the third quarter of 2005. Earnings were 96 cents a share, compared with earnings of 86 cents a share in the third quarter of 2005.

Daily U.S. ground volume increased 3.6 percent in the third quarter, while average daily volume for Next Day Air rose 1 percent and deferred air volume climbed 3.4 percent. Total international package volume grew 19.9 percent.
“UPS is moving forward with confidence,” said Mike Eskew, UPS chairman and CEO. “Our small package business continues to show strength across all segments and we are taking the steps necessary to put our supply chain business on the right track after a disappointing performance.”

Through nine months, UPS had net income of USD3.1 billion and earnings of USD2.82 a share on USD30.1 billion in revenue, compared with net income of 2.8 billion and earnings of USD2.52 a share on USD26.2 billion in revenue in the same period of 2005.

In other news, Reuters reports Thursday the UPS will cut 1,200 jobs from its freight forwarding division this quarter. This move will save the package shipper about USD100 million next year.

Also according to Reuters, integrating the recently acquired Overnite Corp. in its less-than-truckload subsidiary has been difficult. Suffering some customer losses, an official told Reuters, the LTL business should “break even” this quarter and further improve in 2007.

UPS is the second-largest package shipper at Memphis International Airport after Memphis-based FedEx Corp. (NYSE: FDX). UPS employs about 1,700 in Memphis.