The Atlanta-based parcel giant saw its net income jump 15.4 percent year-over-year to $1.3 billion, led by double-digit profit growth in the international, supply chain and freight segments.
UPS Inc. in the first quarter of 2018 grew its earnings 15.4 percent to $1.3 billion compared with the same 2017 period, according to the company’s most recent financial statements.
The Atlanta-based parcel giant and third-party logistics provider posted diluted earnings per share of $1.55 for the quarter compared with $1.33 per share in Q1 2017, in line with consensus analyst expectations.
Quarterly revenues jumped 10.3 percent year-over-year to $17.1 billion, beating analyst expectations by $670 million.
UPS attributed the strong performance primarily to double-digit operating profit growth in the company’s international, supply chain and freight segments. Those gains were offset in part by declining profits in the company’s domestic division and a 12.2 percent increase in operating costs to $15.6 billion.
Consolidated international and domestic average daily package volumes rose 4.6 percent and average revenue per piece grew 4.3 percent.
“Top-line growth in our business was strong across all business segments, reflecting the power of UPS’ global solutions and continued favorable economic conditions,” UPS Chairman and CEO David Abney said of the results. “When combined with our transformation initiatives, these favorable trends position UPS for strong returns going forward.”
Operating profits in the company’s international division surged 14.7 percent year-over-year to $594 million on revenues that grew 14.9 percent to $3.5 billion. Daily export shipments for the segment increased 12 percent compared with first quarter 2017, led by continued volume growth in Europe and the United States, while import volumes slipped 0.8 percent.
“The execution of our diversified global strategies and our investments produced double-digit growth in revenue and profit,” said Abney. “Each of our international regions is contributing to our financial gains, and we expect this strong momentum to continue.”
In UPS’ supply chain and freight segment, Q1 2018 operating profits stood at $170 million, a 14.1 percent gain from the same quarter a year ago, as revenues jumped 15.6 percent year-over-year to $3.4 billion. The increase was led by a 27 percent boost in forwarding revenues and a 9.9 percent uptick in freight revenues resulting from “solid” less-than-truckload volume and rate growth, UPS said.
The company’s U.S. domestic unit, on the other hand, reported a 20.4 percent decrease in first-quarter operating profits to $756 million, due in part to an $85 million impact from severe winter weather as well as Saturday deployment costs, network expansion and higher pension expenses. Revenues for the segment grew 7.2 percent to $10.2 billion compared with Q1 2017, as higher base rates and fuel surcharges contributed to a 2.6 percent increase in revenue per piece and average daily package volumes grew 4.6 percent.
Looking ahead to the remainder of this year, UPS reiterated its projections for full-year 2018 adjusted diluted earnings per share in a range of $7.03 per share to $7.37 per share. The company is planning for capital expenditures of between $6.5 billion and $7 billion for the year.
“Our focused business strategies are producing strong results in both the international and supply chain segments,” said UPS Chief Financial Officer Richard Peretz. “The benefits from our investments, new multiyear transformation efficiencies and stronger pricing position us well for shareowner value creation.”
UPS delivers strong Q1 results
