UPS sees Q2 growth in earnings, revenues

The Atlanta, Ga.-based parcel giant posted a net income of $1.27 billion for the second quarter of 2016 on revenues of $14.63 billion, year-over-year increases of 3.2 percent and 3.8 percent, respectively.    UPS Inc. grew net income in the second quarter of 2016 3.2 percent to $1.27 billion compared with the second quarter of 2015, according to the company’s most recent unaudited financial statements.
   The Atlanta, Ga.-based parcel giant saw diluted earnings per share (EPS) for the quarter rise 5.9 percent year-over-year to $1.43 per share, in line with consensus analyst expectations. Revenues for the quarter missed analyst expectations by $20 million despite increasing 3.8 percent to $14.63 billion compared with the same 2015 period.
   The company’s U.S. Domestic Package segment grew second quarter operating profits 2.7 percent to $1.23 billion thanks to a 2.4 percent increase in revenues to $9 billion. Average daily package volume rose 2.5 percent, with Next Day Air up 5.6 percent and Ground products up 2.4 percent compared with second quarter 2015.
   Operating profits in the International Package unit surged 11.1 percent year-over-year to $613 million for the quarter, a record for the division, as revenues ticked up 1.1 percent to $3.1 billion. UPS attributed the strong growth to increased volumes, disciplined pricing and network efficiency gains.
   Daily export shipments for the segment grew 3.9 percent compared with second quarter 2015, as growth out of Asia and Europe offset declines in U.S. exports. The transatlantic trade between Europe and the United States increased at a double-digit rate thanks to the continued strength of the U.S. dollar.
   The Supply Chain and Freight Segment, on the other hand, saw operating profits slip 7.2 percent to $192 million despite a 13.2 percent increase in revenues to $2.54 billion, driven primarily by UPS’s $1.8 billion acquisition of Coyote Logistics in third quarter 2015.
   “UPS produced solid second quarter results, despite the continued uncertainty in the macro economy,” Richard Peretz, UPS chief financial officer, said in a statement. “The technology and productivity investments in our integrated network are delivering strong results.”
   Looking forward to the remainder of the year, Peretz said the company reaffirmed its guidance for 2016 full-year diluted earnings per share of $5.70 to $5.90 per share.