UPS operating profits grow 8.7% in second quarter

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Operating profit at UPS increased 8.7 per cent in the second quarter of 2017 with growth in the US domestic package and supply chain & freight sectors making up for profits declining in international packages.

The total operating profit was $2.2 billion, with US domestic package operating profits up 13.1 per cent to $1.4 billion, and supply chain & freight by 24 per cent to $238 million.

International package operating profit was down 4.9 per cent to $583 million compared to $613 million in 2016, but on a currency neutral basis, operating profit in 2017 would have been $697 million.

UPS chairman and chief executive officer, David Abney says: “UPS generated great year-over-year revenue gains in the second quarter and we produced solid earnings per share growth, consistent with our plans. We continue to invest in our network to expand our capabilities, our market presence and our global reach.”

In the US domestic segment, next day air and deferred air shipments increased 6.4 per cent and 11 per cent respectively, and operating costs for ongoing initiatives including facility construction and Saturday operations increased costs by $35 million.

Increased demand for cross-border shipments helped the international segment with export growth of 12 per cent, led by Europe and Asia.

UPS announced an exclusive partnership with Expo 2020 Dubai, created an alliance with Chinese logistics company, SF Express, and acquired Irish company Nightline Logistics.

Supply chain & freight revenue increased 12 per cent to $2.8 billion and tonnage gains in freight forwarding and UPS Freight contributed to improved top-line results.

In the first half of 2017 total operating profit was up 3.6 per cent to $4 billion, with US domestic growing 5.8 per cent to $2.4 billion, supply chain & freight by 23 per cent to $417 million, and international package down 6.3 per cent to $1.1 billion.