UPS international segment sees record Q1 profits

UPS has said that its Q1, 2019 earnings were hit by the severe US winter, which reduced its profits by around $80 million.

Due to company transformation charges there is to be a pre-tax charge of $123 million to shares. The transformation programme is to drive efficiencies through the company and to produce higher quality revenue growth.

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

“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.”

UPS is investing heavily in highly automated hubs to drive greater efficiency into the network. US Domestic revenues saw a 2.5% growth over Q1, 2019.

“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.”

The international segment of the company saw record Q1 operating profits, that UPS attributes to the strength and flexibility of its global network even in a changing global trade environment. Operating margin was 15.3% and 17.7% on an adjusted basis. The adjusted margin expanded 90 basis points+ over the prior period.

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