UPS Earnings Jump 23%Led by strong worldwide gains in package volume and the expansion of its supply chain and freight business, UPS reported yesterday a 17.9 percent increase in revenue and an adjusted 22.9 percent rise in diluted earnings per share for the third quarter.
For the three months ended Sept. 30, earnings per diluted share were 86 cents versus 78 cents in the prior-year period. Adjusting for a tax credit that helped earnings in 2004's third quarter, diluted earnings per share rose 22.9 percent, up from 70 cents a year ago.
"This has been a great quarter of growth for UPS," chairman/CEO Mike Eskew said. "We have tremendous momentum right now in the U.S. and around the world, and we see it continuing."
Consolidated revenue climbed to $10.55 billion, up from $8.95 billion in the prior-year period. Consolidated operating profit jumped 19.1 percent to $1.5 billion, while net income totaled $953 million. Global average daily package volume increased by 4.7 percent -- or by 644,000 packages daily -- to 14.3 million.
A 4 percent gain in U.S. average daily volume exceeded economic growth rates. This gain was paced by a 6.1 percent increase in Next Day Air packages. Average daily ground package volume rose 3.6 percent. Outside the United States, total average daily package volume rose 11.2 percent to 1.5 million a day, paced by double-digit gains in Europe and Asia.
For the full year, chief financial officer Scott Davis said UPS should meet its expectation of an 18 percent to 20 percent rise in diluted earnings per share compared with the adjusted $2.90 reported in 2004. (The 2004 diluted earnings per share on a GAAP basis were $2.93.)
For 2006, the global small package business should remain strong, Davis said, resulting in exceptional operating profit in both the domestic and international segments. UPS also expects steady improvement in its supply chain and freight services business.