UPS publishes third quarter results

Operating profits were up over 10% in the third quarter of 2015 for UPS to USD $507 million on revenues of $14.2bn. Currency exchange rates and fuel surcharges impacted the revenues, which were down slightly on the previous quarter. Cutting out the currency factor, revenues increased by 1.8%.

Total shipments from the company around the world increased by 1.9% to 1.1bn packages. US air products and European cross border shipments led this increase.

Domestically in the US, UPS bought a truckload brokerage company called Coyote Logistics and this is hoped to ‘create over $100 million of synergies’ that should boost revenues even further in the coming years. The US domestic package delivery business grew by 1.9% against the same quarter last year, though operating profit declined 1.6% to $1.3bn with a margin of 14.2%. The US parcels market is extremely competitive and there is very little space for a giant such as UPS to grow.

Instead it has focused on international markets. The company’s international package business was the big hit in this quarter’s results, with global business increasing by over 10%. The operating margin increased too, by 17.1%. Though there was a drop in its Asian business and that of US exports, the European markets more than made up for this fall.

UPS made its objections plain to the European Commission in the last month or so to the planned takeover of Dutch parcels company TNT by FedEx. UPS will be the third biggest international express company in Europe after this takes place, overtaken by FedEx. Currently, with its European business booming, UPS is still a major player in Europe.

UPS Chief Financial Officer Richard Peretz said of the encouraging results, “This gives us confidence we will achieve the higher-end of our full-year earnings per share guidance.”