UPS reports $16.1bn Q4 revenue
UPS has reported that its total revenue for the fourth quarter (Q4) of 2015 was $16.1bn. This was up only slightly on Q4 2014 because, according to UPS, revenue growth “was slowed by currency translations and lower fuel surcharges”.
On a currency-neutral basis, added UPS, revenue was up 2.4% compared to the same period last year.
The company posted adjusted diluted earnings per share of $1.57 for the quarter, a 26% increase on Q4 2014. For the full year, UPS achieved adjusted diluted earnings per share of $5.43, an increase of 14% over 2014 adjusted results.
All three UPS business segments – Domestic Package, International Package and also Supply Chain & Freight – increased their operating margins and generated double-digit operating profit growth in Q4 2015.
“Our flexible integrated network, close collaboration with customers and the extraordinary efforts of UPSers enabled us to achieve great service and record financial performance this quarter,” said David Abney, UPS chief executive officer. “This year’s results build on our multi-year strategy to deliver improved shareowner value.”
UPS delivered 1.3bn packages in Q4 2015, an increase of 1.8% over the same period last year. For calendar year 2015, the company delivered 4.7bn packages, up 2.1% over 2014. During peak season 2015, UPS delivered 612m packages.
Revenue for the US Domestic package segment increased 2.6%, to $10.3bn.
“Strong demand from ecommerce shippers contributed to a 2.4% increase in average daily shipments,” said UPS. “Deferred Air products soared 15% and Next Day Air was up 10% over the same period last year. UPS completed deliveries to more than 1.9m new addresses during December, demonstrating the growing influence of online retail.
“Adjusted operating profit increased $209 million, or more than 18% over the fourth-quarter 2014 adjusted results.”
On a reported basis, operating profit increased $840m, or 189% with operating margin of 12.5%, as a result of the mark-to-market pension entries mentioned above.
“International adjusted operating profit was up 16%, to $624 m, in the fourth quarter, led by strong performance in Europe,” said UPS. ” Disciplined pricing, favourable customer and product mix, combined with improved operational performance, drove increased profitability. For the first time, the International segment surpassed $2 b in annual adjusted operating profit.”
For the Supply Chain & Freight segment, adjusted operating profit increased 11%, to $199m over adjusted 2014 fourth-quarter results. Total segment revenue increased 6.0% to $2.6 bn.
UPS added: “The inclusion of Coyote Logistics revenue for the full quarter more than offset the impact of softer markets, lower fuel surcharges and actions to improve revenue quality in the other business units.”
Summing up the results, Richard Peretz, UPS chief financial officer, said: “This was the fourth consecutive quarter that UPS exceeded our financial expectations.
“Our business generated strong results in 2015. While we face uncertain macro-economic conditions, we are continuing to invest for profitable growth.”