Tag: International

UPS reported a 6.7 pct revenue increase in the second quarter but an 18.3 pct decline in diluted earnings per share to USD 0.85 compared to USD 1.04 the prior year. Increasing fuel costs and a stagnant U.S. economy caused the earnings decline in both the U.S. Domestic and International Package segments.

In contrast, the Supply Chain and Freight segment posted a substantial improvement in profitability.
“Although operating conditions in the second quarter were challenging, UPS firmly believes the long-term growth fundamentals for our company and for our industry are very favorable,” said Scott Davis, UPS chairman and CEO. “We are helping our customers manage through this difficult period while doing everything we can inside UPS to adapt to current conditions.”

For the three months ended June 30, 2008, UPS delivered consolidated volume of 959 million packages, essentially unchanged from the second quarter last year. Revenue rose to USD 13.0 billion and revenue per piece increased 5.9 pct. Results were negatively affected by a 67 pct increase in fuel expense, a reduction in premium product volumes and weakness in U.S. imports.

The slow U.S. economy caused average daily volume in the United States to decline 1.3 pct in the quarter and also contributed to a more pronounced reduction in premium products than in the previous quarter. Volumes per day declined 6.1 pct for Next Day Air, 2.3 pct for deferred air and 0.7 pct for ground. Consolidated revenue per piece rose 3.1 pct, increasing for all services.

These factors, along with the rapid increase in fuel cost and the impact of the two-month lag in the application of the fuel surcharge, were responsible for the declines in second quarter operating results.
During the quarter, UPS and DHL announced they were working on a 10-year agreement through which UPS would provide air lift for DHL’s express, deferred and international volume within the U.S. and between the U.S., Canada and Mexico.

International results were negatively impacted by higher fuel costs, declining U.S. import volume and slower growth in premium services in the major regions of the world.

Export volume increased an industry-leading 10.2 pct, aided by the calendar effect of an early Easter, which boosted growth rates by approximately 2 pct. However, volume growth slowed significantly through the quarter.