The parcel giant reported improved profitability across all business units in the first quarter 2015, thanks primarily to new pricing initiatives, revenue management and strong growth in international volumes.
UPS increased diluted earnings per share 14 percent to $1.12 per diluted share in the first quarter 2015 compared with the same period in 2014, according to the company’s latest financial statements.
Operating profit grew 11 percent to $1.7 billion, as each of the UPS’s three business units showed improved profitability for in the quarter. UPS reported total revenues of $14.0 billion, up 1.4 percent year-over-year.
Total volumes at the parcel giant increased 2.8 percent to 1.1 billion packages, led by volume growth in European exports of 9.4 percent.
Operating profits from the company’s U.S. domestic package segment were up 11 percent to $1.0 billion in the first quarter, thanks to a 3.8 percent increase in revenues to $8.8 billion compared to the first quarter 2014. UPS attributed the revenue growth primarily to a 12 percent jump in deferred air volumes, a 7 percent increase in UPS SurePost and 2.4 percent growth in daily package volumes.
The company’s international package segment increased its operating profit 14 percent year-over-year to $498 million on revenues of $3.0 billion, a 2.4 percent improvement on a currency-neutral basis. Volume growth, pricing initiatives and lower fuel expense all contributed to improved profitability, according to UPS.
Overall international export shipments grew 6.7 percent, as European export volumes at UPS continued their annual growth rate of approximately 9 percent over the past 10 years.
Revenues in the company’s supply chain and freight segment increased 1.3 percent to $2.2 billion, driven by 2.3 percent revenue growth in UPS Freight. UPS said revenue growth for the unit was tempered by currency exchange rates, reduced fuel surcharge revenue, and continued investment in technology and infrastructure.
“The first quarter results were favorably impacted by our continued investments and revenue management initiatives,” said CEO David Abney. “These actions delivered high value to our customers and shareowners. We are on track to achieve the company’s long-term financial targets.”
Looking forward, Kurt Kuehn, UPS chief financial officer, said, “Solid performance across all three business segments was led by positive momentum in International, gains from revenue management and productivity improvements in the U.S. We remain on plan to meet our guidance for full-year 2015 diluted earnings per share of $5.05 to $5.30, a 6 percent-to-12 percent increase over our 2014 adjusted results.”
UPS also recently announced that Keuhn will retire after 38 years with the company, effective July 1. He will be replaced as chief financial officer by Richard Peretz, who joined UPS in 1981 and currently serves the company’s corporate controller and treasurer.
UPS increases EPS 14% in Q1
