UPS reports higher net income, revenues in Q3

The Atlanta, Ga.-based shipping and logistics provider reported year-over-year increases in net income and revenues for the third quarter of 2016 despite pressure from changes in fuel surcharges and currency exchange rates.    UPS reported a net income of $1.3 billion for the third quarter of 2016, up 1 percent from the third quarter of 2015.
   Earnings per share for the quarter totaled $1.44 per share, in line with analyst estimates, according to both the Wall Street Journal and Reuters.
   The Atlanta, Ga.-based parcel giant’s revenues for the quarter rose 4.9 percent year-over-year to $14.9 billion, despite being hindered by changes in fuel surcharges and currency exchange rates.
   In the U.S. Domestic Package segment, operating profits slipped 0.5 percent year-over-year to $1.3 billion, while revenues ticked up 4.8 percent from the third quarter of 2015 to $9.3 billion. The segment’s average daily package volumes rose 5.7 percent year-over-year driven by e-commerce.
   Operating profits in the International Package segment soared 13.6 percent from the third quarter of 2015 to $576 million thanks to volumes growth in all products, base-rate increases and network efficiency gains. The segment’s revenues rose 2.2 percent year-over-year to $3 billion. Daily export shipments rose 7.1 percent from the third quarter of 2015 due to double-digit gains in Asia, while total international package volumes increased 7.5 percent from a year prior.
   In the Supply Chain & Freight segment, operating profits slipped 5.9 percent year-over-year to $206 million. Revenues rose 8.1 percent from the third quarter of 2015 to $2.6 billion, primarily due to the Coyote Logistics acquisition midway through the third quarter of 2015. “Weak market conditions in the air freight forwarding and LTL (less-than-truckload) markets weighed on top-line growth,” UPS said.
   UPS also said it has ordered 14 new Boeing 747-8 cargo jets to meet increased demand for the company’s air shipping services. The freighters, which are scheduled to be delivered between 2017 and 2020, can carry 34 shipping containers on the main deck and 14 in the lower compartments. They have a capacity of 307,600 pounds and a range of 4,340 nautical miles. Financial details on the deal were not disclosed.
   Looking ahead into the holiday season, UPS projects record seasonal global freight delivery volumes will be over 14 percent above the peak delivery period last year. UPS expects to deliver over 700 million packages globally in 25 days between Thanksgiving and New Year’s Eve and anticipates on employing more than 95,000 temporary seasonal workers for the holidays.
   “UPS has increased the level of planning and close collaboration with its largest holiday shippers in order to develop early seasonal shipping forecasts,” the company said.