Strike Jitters Hurt UPS Numbers

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Revenue at United Parcel Service was up slightly for the second quarter, but other numbers released this week were down compared with last year's second quarter.


Contract negotiations between UPS and the Teamsters union contributed to the decline, the carrier said, as customers worried about a possible strike shifted to FedEx and other carriers. UPS and the Teamsters agreed to a new contract two weeks before the current one was set to expire July 31.


UPS, Atlanta, has said that it was losing 250,000 packages a day to FedEx and other rivals in the weeks leading up to the settlement. Domestic package volume dipped 2.6 percent for the quarter, which ended June 30, but fell 4 percent in June.


Lost volume due to the threat of a strike also will affect third-quarter domestic volume, the company said.


Overall revenue for the second quarter was $7.68 billion, up 2.5 percent from last year. Consolidated operating profit declined 1.2 percent to $1.03 billion, and net income was $611 million, down from $630 million last year. Domestic revenue was $5.91 billion, down 1.2 percent from the prior year. Operating profit declined 6.9 percent to $899 million.


In the international segment, operating profit rose from $24 million last year to $62 million, and revenue increased 9 percent to $1.14 billion. Export volume continued to outperform market growth, posting an overall 8.8 percent increase with 17 percent reported in Asia and 13 percent in Europe. UPS said the opening of an Asian air hub in the Philippines increased volume 20 percent among countries using those lanes.


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