UPS: “No signs of economic strengthening”
UPS: “No signs of economic strengthening”
UPS said a decline in U.S. economic activity affected the company’s results in the first quarter.
“We see no signs of economic strengthening in the second quarter,” said Kurt Kuehn, UPS’s chief financial officer.
The company had a first quarter profit of $906 million, 7.5 percent higher than in the first quarter 2007, but 11.8 percent lower if an impairment charge related to aging jet aircraft and expenses for a voluntary separation program were included.
Revenue for the quarter was $12.7 billion, 6.5 percent higher than the same 2007 period.
“U.S. economic activity deteriorated more rapidly than expected during the quarter,” said Scott Davis, UPS chairman and chief executive officer. “While we will be extremely vigilant with respect to costs in this difficult environment, we will not lose our focus on growing the business. We will continue to invest in the infrastructure, new products and services that will enable our customers to succeed in the global marketplace.”
“UPS has successfully managed its operations through many economic cycles and we will do so again,” Davis added.
The company said it delivered 968 million packages in the first quarter, about the same as in the first quarter the prior year period.
Domestic package deliveries accounted for $7.74 billion in revenues, up 2.5 percent. Domestic volumes were down 0.3 percent and the company said there was a shift away from premium products such as Next Day Air International package deliveries were up 15.7 percent to $2.76 billion.
“U.S. export volume growth was strong, leading to a balanced global performance with Asia, Europe and the U.S. each experiencing a double-digit increase,” UPS said.
The company’s supply chain and freight segment saw revenue increase 10.6 percent to $2.18 billion. “Forwarding and logistics revenue increased 12.8 percent, driven by the new air freight portfolio launched in January. less-than-truckload freight revenue grew 4.1 percent and was constrained by the slowing U.S. economy. Operating profit for the segment more than doubled.”