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Forwarding arm revenue grows 24% for UPS in Q1

Apr 29

Forwarding arm revenue grows 24% for UPS in Q1

UPS’ first-quarter 2019 earnings were strengthened by higher-quality revenue and benefits from investments in its global network, with the forwarding arm one of the strongest performers.

First-quarter adjusted results exclude a pre-tax charge of US $123 million, or $0.11 per share after tax, due to Transformation-related charges. These projects will create efficiencies across the enterprise and produce higher-quality revenue growth, it said in a release.

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“The first quarter marked a good start to the year, as we executed against our strategy and generated solid performance across our business,” said David Abney, UPS chairman and CEO.

“Our Transformation initiatives are enhancing revenue quality and creating network efficiencies that will increase our long-term earnings power. We are on a path to take advantage of growth opportunities and enhance our future performance,” he added.

Consolidated revenue increased to $17.2 billion, driven by gains in average daily volume and higher-quality revenue.

U.S Domestic continued a positive trend, increasing business-to-business volume once again this quarter. Revenue grew to US $253 million or 2.5% over 1Q 2018.

Additionally, investments in new automated hubs contributed to improvements in operational measures including productivity gains and slower growth in unit costs.

“We are bending the cost curve in our U.S. Domestic segment as highly automated hubs come online, producing improved productivity benefits,” said Abney. “These improvements contributed to the segment’s performance in the quarter and will continue to gain momentum going forward.”

Supply Chain and Freight produced strong profit growth in the quarter. The segment also expanded operating margins, driven by disciplined cost-management initiatives and the flexibility of the network to adapt to changing market conditions.

“Supply Chain and Freight generated excellent operating profit this quarter, with strong contributions from Coyote and the rest of our Forwarding unit,” said Abney. “We continue to execute our asset-light strategies, while providing our customers with the high-quality service they expect.”

The segment generated strong growth in operating profit of $200 million and adjusted operating profit of $211 million, a more than 24% increase over the first quarter of 2018.

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