Rise in international packages, rates lift UPS profits

Rise in international packages, rates lift UPS profits    Increases in the number and prices of international packages at UPS boosted the Atlanta-based group’s revenues and profits in the fourth quarter.
   UPS earned a net income of $856 million in the fourth quarter, up 28 percent from a 2002 fourth-quarter adjusted net income of $670 million. However, without the 2002 adjustment, the latest result would have compared to a 2002 net income of $1.5 billion.
   Total revenue in the latest quarter rose 8 percent, to $8.9 billion, as revenue from international packages soared 17 percent, to $1.5 billion. Revenue from U.S. domestic packages edged up 7 percent, to $6.7 billion, and revenue from non-package activities, including logistics, rose 3 percent, to $755 million.
   UPS increased its total package volume to 15.2 million a day on average in the fourth quarter, 5 percent more than in the same period of 2002. International packages amounted to 1.4 million packages a day, an increase of 6 percent, while domestic packages increased 5 percent in volume, to 13.8 million a day.
   The big integrator obtained a 4-percent increase in yield, to $8.67 per piece shipped in the latest quarter. Average revenue per international package jumped 13 percent, to $16.43, over the same period.
   UPS cited “strong volume gains both in the United States and overseas and significant margin improvement within its international operation.”
   Export volume out of the U.S. increased more than 10 percent, the largest such increase since 2000, the company said. Within the United States, average daily package volume jumped 5 percent in the fourth quarter to a record 13.8 million. U.S. ground volume surged 5 percent, while Next Day
Air' volume climbed 3.5 percent and deferred air volume rose 4 percent.
   Operating profit in the fourth quarter was up 18 percent, to $1.3 billion. Of this amount, U.S. domestic package activities contributed an operating profit of $911 million, up 10 percent, international packages brought in an operating income of $241 million, up 57 percent, and the non-package business earned an operating income of $121 million, up 27 percent.
   For the year, UPS reported a net income of $2.9 billion, up from an adjusted 2002 income of $2.4 billion. The 2003 net income represents 8.7 percent of group revenue.
   Revenue for 2003 was $33.5 billion, 7 percent more than the $31.3 billion revenue in the previous year. Operating profit increased 11 percent last year, to $4.4 billion.
   For 2004, UPS expects U.S. package volume growth rates of about 4 percent. It said that it anticipates “continued vibrant growth in the international segment,” with about a 20 percent increase in profitability.