UPS Q3 Earnings Climb
• Repurchased 9.3 million shares at a cost of $589 million.
U.S. Domestic Package
Adjusted operating profit increased 77 percent to $911 million on revenue growth of 6 percent. The margin expansion of 500 basis points was driven by volume growth, improved yields and the benefits of more streamlined operations. Reported operating profit was $1.02 billion, a 98 percent increase.
Average daily package volume expanded 3.6 percent during the quarter due to growth in Ground and Next Day Air. Revenue per piece improved 4 percent, primarily through increases in base pricing and higher fuel surcharges.
During the quarter, UPS introduced Returns Flexible Access, expanding the options for consumers to return goods to retailers. The combination of UPS and postal access channels creates the most extensive returns network available to consumers today.
The operating profit for the segment increased 34 percent to $419 million on an 11 percent increase in revenue. Operating margin improved 280 basis points to 15.7 percent. Export average daily volume increased 13 percent, outpacing the market, due to growth in all regions with Asia leading the way, up more than 30 percent.
Non-U.S. domestic volume increased 14 percent with strength across Europe, Canada and Mexico.
As part of an on-going strategy to grow its business in emerging markets, UPS entered into an expanded alliance with its local domestic courier in Indonesia. This agreement extends the footprint for pick-up and delivery of international express packages throughout the country.
Supply Chain and Freight
Revenue grew 19 percent with the Forwarding business unit leading the way. Operating profit jumped 74 percent to $177 million, powered by Forwarding and Logistics.
The operating margin for the segment increased 250 basis points to 8.0 percent. This margin expansion was primarily driven by improved revenue management, increased tonnage and improved operational efficiencies in Forwarding and Logistics.