UPS 3rd quarter profit dips in ?challenging environment?

UPS 3rd quarter profit dips in ôchallenging environmentö UPS said it had third quarter net profit of $970 million compared to $1.08 billion in the same 2007 period.
   Revenues for the quarter was $13.1 billion compared to $12.2 billion.
   The company said its “international and supply chain businesses demonstrated strength despite a challenging global economic environment.”
   “UPS managed the business well in this very tough economic climate,” said Scott Davis, UPS’s chairman and chief executive officer. “We continue to see growth in our international and supply chain businesses, while maintaining our focus on cost control and revenue management throughout our organization. UPS also is investing to ensure growth in the future so that the company will be even stronger when the global economy rebounds.”
   Kurt Kuehn, UPS’s chief financial officer, said, “Based on economic forecasts, we anticipate a challenging environment for a number of quarters going forward. We believe the U.S. consumer will be very conservative with spending this year.
   “We’ve taken steps to effectively manage our costs and enhance service levels in an environment that proved substantially worse than we initially anticipated, with significant slowing toward the end of the quarter,” he said.
   The company said for the three months ended Sept. 30    consolidated revenue per piece increased 8.1 percent while package volume per day declined 2.6 percent.
   Average daily U.S. domestic volume declined 3.4 percent, which the company said reflected ongoing weakness in the U.S. economy. Air products posted declines of 6.4 percent and ground volume decreased 2.8 percent.
   It said domestic revenue per piece increased 5.8 percent, led by UPS Next Day Air rising 11 percent as a result of higher fuel surcharges and continued focus on revenue management. Third quarter results were positively impacted by about $90 million due to the two-month lag in fuel surcharges.
   During the quarter, UPS expanded its customer service options for air package pick-up, enabling later pick-ups for urgent business needs for about one-quarter of all U.S. businesses.
   Reporting on its international business, UPS said export volume per day increased 7 percent, “outpacing the market, despite decelerating economic growth in most areas of the world. The company’s broad global network and unique products, such as UPS Paperless Invoice and international UPS Returns, helped drive this gain.”
   The company said, “Investment in global infrastructure expansion also continued. In the fourth quarter, UPS will open its new hub in Shanghai. This is the first hub constructed by a U.S. carrier in China and will link all of China via Shanghai to UPS’s international network with direct service to the Americas, Europe and Asia.”
   The company said its supply chain and freight business had revenue growth of 9 percent.
   “The forwarding and logistics operations again demonstrated the momentum seen in the first half of the year. Customers have responded well to the enhanced air freight portfolio that UPS unveiled in January,” it said. “UPS Freight less-than-truckload performance was negatively impacted by the slowing U.S. economy”