UPS Reports Strong Second-Quarter Profits, But Outlook Disappoints

Share this content:

UPS Inc. reported July 25 a 7.6 percent increase in second-quarter profit on strong sales.

But the results fell short of Wall Street expectations, and the company warned that its full-year earnings growth would be at the low end of its original forecast.

The Atlanta-based company said it earned $1.06 billion for the three months that ended June 30, compared with a profit of $986 million for the same period a year ago.

Revenue in the quarter rose 15.2 percent to $11.74 billion, up from $10.19 billion a year earlier.

All levels of service posted gains. Total international package volume grew 16.5 percent, UPS said, even though there were three fewer operating days in Europe than in the same quarter last year.

Deferred air volume, climbed 7.6 percent. Daily ground volume increased 4.6 percent, while average daily volume for Next Day Air rose 4.2 percent. Total revenue-per-piece remained firm with a gain of 2.7 percent.

During the second quarter, UPS announced a $1 billion expansion of its Worldport hub in Louisville, KY. The 1.1 million square-foot expansion will increase sorting capacity by 60 percent to 487,000 packages per hour. This five-year expansion plan reflects excellent growth projections in UPS's air package volume around the world, UPS said.

For the first six months of the year, UPS ( earned $2.04 billion, compared to a profit of $1.87 billion for the same period a year ago. Six-month revenue rose 15.8 percent to $23.26 billion from $20.08 billion a year earlier.

The company said it expects diluted earnings per share in a range of 87 cents to 91 cents in the third quarter, compared to the 86 cents reported during the prior-year period. UPS said the third quarter had fewer operating days than the prior-year period, negatively impacting earnings per share comparison approximately 4 to 5 cents share

The company also said that it expects full-year earnings growth to be at the low end of the company's original estimate of 11 percent to 16 percent growth for 2006.

Loading links....

Sign up to our newsletters

Company of the Week

We recently were named B2B Magazine's Direct Marketing Agency of the Year, and with good reason: We make real, measureable, positive change happen for our clients. A full-service agency founded in 1974, Bader Rutter expertly helps you get the right message to the right audience at the right time through the right channels. As we engage our clients' audiences along their journey, direct marketing (email, direct mail, phone, SMS) and behavioral marketing (SEM, retargeting, contextual) channels deliver information relevant to the needs of each stage. We are experts at implementing and leveraging marketing technologies such as CRM and marketing automation in order to synchronize sales and marketing communications. Our team of architects and activators plan, execute, measure and adjust in real time to ensure the strategy is working as needed and change things if it's not.

Find out more here »

DMN's Career Center

Check out hundreds of exciting professional opportunities available on DMN's Career Center.  
Explore careers in digital marketing, sales, eCommerce, marketing communications, IT, data strategies, and much more. And don't forget to update your resume so employers can contact you privately about job opportunities.

>>Click Here