International, trucking units lead 2nd quarter growth for UPS

International, trucking units lead 2nd quarter growth for UPS    UPS said its second quarter operating profit increased $700 million to $1.77 billion as revenue swung up 3.9 percent to $12.19 billion on the strength of its international package delivery business, and improvements in its domestic freight and supply chain units.
   Domestic package delivery continued to lag in terms of growth with operating profits down to $1.19 billion from $1.23 billion, operating margins at 15.7 percent and average daily volume down slightly to 13.23 million packages versus 16.5 percent margin and 13.25 million packages per day in the second quarter of 2006.
   The world’s largest package delivery company said flat ground volume reflected declining growth rates in industrial production and business-to-consumer shipments. Next Day Air volume increased 1.6 percent to partially offset a 4 percent decline in deferred air volume.
   “Toward the end of the year, we expect the small package market to more closely correlate to U.S. economic trends and as a result, we should see gradual volume growth in our U.S. package business,” said Scott Davis, chief financial officer, in a statement.
   Overall, UPS reported international export revenues grew 14 percent to $2.5 billion on 10.4 percent volume growth for the quarter ended June 30. Net income was $1.4 billion. UPS achieved 19 percent margins on international packages compared to 18.5 percent in the year-ago period on volume of 1.8 million pieces per day. Asia export volume was up 25 percent, with particularly strong growth out of China, the Atlanta-based company said.
   UPS Freight, the company’s U.S. less-than-truckload segment, experienced a 7.6 percent increase in operating revenue to $549 million on a 12 percent increase in shipments during a period when many trucking companies saw volumes decline due to slowdowns in several parts of the economy.
   UPS lumps together the results of its Freight and Supply Chain units, which saw combined revenue of $2.1 billion and operating profit more than double to $98 million. Forwarding and logistics revenue remained flat at $1.4 billion.