UPS sees 6th successive quarter of double digit growth

UPS has managed its sixth successive quarter of double digit growth, with its international operating profit increasing 11% to US$613 million in Q2 of 2016.

Total revenue for the quarter was $14.6bn, up 3.8% on 2015. The international delivery and logistics company has said that may have been greater but for changes in fuel surcharges and currency exchange rates. If growth was measured on a currency neutral basis, revenues increased by 4%. Lower fuel surcharge rates hit revenue growth by around 120 basis points.

“We are investing to expand our global network, implementing new technologies and capturing new revenue in high-growth markets,” said David Abney, UPS chairman and CEO.  ”These strategic investments in our diversified business again this quarter generated strong value for our customers and shareowners.”

Looking at the US domestic package sector, UPS’s operating profit increased to $1.2bn and total revenue was up 2.4% at $9bn.  Average daily package volume increased 2.5%, with Next Day Air up 5.6% and Ground products up 2.4%.  UPS added: “Strong business-to-consumer (B2C) growth trends continued this quarter, outpacing business delivery growth more than five to one.”

In the international package sector, operating profit jumped more than 11% to $613m – which was a Q2 record for UPS – and  revenue was up 1.1%.

“Daily Export packages increased 3.9%, as growth out of Europe and Asia offset lower US levels,” said UPS. “The Europe-to-US trade lane increased at a double-digit pace, as customers used the UPS network to benefit from the strength of the US dollar.”

UPS Supply Chain and Freight revenue increased by more than 13% to $2.5bn – which the company said was mainly attributable to the acquisition of Coyote Logistics in the third quarter of last year.

Richard Peretz, UPS chief financial officer, offered this outlook summary: “UPS produced solid second quarter results, despite the continued uncertainty in the macro economy.  The technology and productivity investments in our integrated network are delivering strong results.  We reaffirm our guidance for 2016 full-year diluted earnings per share of $5.70 to $5.90.”