UPS first quarter profits increase 15% to $1.3 billion

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UPS net income increased 15 per cent in the first quarter of 2018 with international packages and supply chain & freight making up for weaker US domestic profits.

Net income increased by 15 per cent to $1.3 billion and revenue was up 10 per cent to $17.1 billion, with average yields rising by 4.3 per cent led by international and US deferred air products.

The International segment’s revenue increased by 15 per cent to $3.5 billion despite two fewer operating days in many countries, with export, domestic and cargo product groups achieving double digit revenue.

Export volume growth in Europe and the US was strong during the quarter and operating profits increased 15 per cent to $594 million.

UPS chairman and chief executive officer, David Abney says: “The execution of our diversified global strategies and our investments produced double-digit growth in revenue and profit. Each of our International regions is contributing to our financial gains, and we expect this strong momentum to continue.”

Supply chain & freight revenue increased by 16 per cent to $3.3 billion and operating profits were up 14 per cent to $170 million with the business unit focusing on high quality, middle-market customers.

The US domestic segment experienced strong demand in the first quarter but both unexpected and planned items hitting operating profits.

Revenue increased 7.2 per cent to $10.2 billion but operating profits were down from $950 million in the first quarter of 2017 to $756 million this year.

Severe winter weather hit operating profits by $85 million, along with Saturday deployment, network projects and higher pension expenses.

Abney says: “Top-line growth in our business was strong across all business segments, reflecting the power of UPS’s global solutions and continued favourable economic conditions. When combined with our transformation initiatives, these favourable trends position UPS for strong returns going forward.”