UPS has reported an 18.2percent gain in net income for the second quarter on a 7.8percent increase in revenue with strong growth in its global small package business. In addition, the company raised its future guidance and expects full year 2004 earnings growth to approach 20percent.
Previously, the company’s guidance called for 2004 earnings at the upper end of a 12-to-18percent range.
Read MoreIs UPS getting ready to make a huge splash in the nation’s ever-consolidating LTL pond? If anyone knows, they are not saying so publicly. But with UPS holding a deep war chest of cash and its competitors investing heavily in their own ground assaults, the question is growing increasingly prominent in the trucking industry.
Read MoreUPS is a solid company poised to benefit from an improving economy and the growth of Internet shopping. It’s also building its competitive edge by developing more efficient route plans and taking advantage of opportunities in Europe.
“It’s got a good yield, it’s a very strong company — and it’s growing,” Stephen Desmond, stock analyst said. “Over time, I think it will do well.”
UPS, which gets 90percent of its income from delivering packages, has three big competitors: Deutsche Post, which owns DHL Express; Federal Express; and post offices around the world, with the most competition coming from the U.S. Postal Service.
Read MoreSupply Chain Solutions ‘next generation’ for UPS
Read MoreUPS and FedEx are going after the same road warriors, telecommuters and home office workers — but their methods are surprisingly different.
FedEx bought Kinko’s this year and plans to spend USD20 million “rebranding” its 1,256 stores with TV spots that began this month proclaiming, “Our office is your office.” UPS, which absorbed Mail Boxes Etc. two years ago, is hunting retail customers, too. But it’s using its 3,400 UPS Stores as a hook for large corporate customers to distribute high-tech parts to field technicians or collect laptop computers or cell phones in need of repairs.
Retail package shipments are vital to both companies because infrequent shippers pay higher prices. “Both companies want high-margin retail customers,” said Greg Burns, transportation analyst at J.P. Morgan Chase. “The goal is the same. But the execution is different.”
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