UPS today reported strong financial results for 2006 and the fourth quarter, with growth drivenmostly by its international business. US package figures remained solid despite the slowing US
economy, but Supply Chain & Freight results slumped heavily.“UPS had a very good year in 2006,” said Chairman and CEO Mike Eskew. “We posted new highs inrevenue, operating profit and earnings per share. We finished the year with a well-executed peakseason, and strong execution will continue to be critical for us as we move forward in 2007.”
In the fourth quarter, ended Dec. 31, 2006, revenue rose by 5.6% to $12.6 billion. Theoperating profit grew by 5.7% to $1.8 billion, resulting in a stable operating margin of 14.3%. Netincome was up by 7.5% at $1.13 billion. Average volume per day grew by 3.3% to 17.3 million from16.8 million in the final quarter of 2005.
UPS said that the fourth quarter produced solid earnings growth despite a slowing US economy.Pricing remained firm around the globe, and consolidated average revenue per piece increased 2%.
For the full year of 2006, revenue rose 11.7% to $47.5 billion, while average daily packagevolumes were up 5.7%. Operating profit increased 8% to $6.6 billion. Net income grew by 8.6% to$4.2 billion.
The international business reached new heights during the full year, reporting more than $1.7billion in operating profit, which was an increase of 14.5%. The company set a new record forpackage volume in 2006, delivering almost 4 billion packages or an average of 15.6 million per day.
But the Supply Chain & Freight division suffered a major slump in profits. Its full-yearoperating profit dropped 98.7% to just $2 million on revenues up 33.5% to $8 billion. UPS said thatQ4 results were an improvement on Q3, reflecting the positive impact of cost control measures takenin the fourth quarter. UPS Freight’s performance was impacted by the general softening in theLess-Than-Truckload (LTL) environment.
Looking ahead for 2007, Scott Davis, UPS’s vice chairman and chief financial officer, said:“We anticipate another good year in our global small package business despite a slowing U.S.economy. We also expect our Supply Chain and Freight segment to gain momentum as the yearprogresses.”
“We’re encouraged by the opportunities we see for our company around the globe,” Davis added.“We’re operating a healthy business in a vital industry, and we believe our long-term strategy ofproviding supply chain solutions to our customers is right on target.”
