UPS announced today it generated strong profit growth in the July – September third quarter of2010 with better results in domestic US packages, international and supply chain businesses, and
raised its guidance for full-year results.The company said that adjusted diluted earnings per share rose 69% to $0.93 for the thirdquarter of 2010. Adjusted operating profit soared by 62% to $1.51 billion and adjusted net incomewas up 69.4% at $930 million. UPS recorded an after-tax benefit of $61 million on the sale of realestate, leaving reported net profit up 80.5% at $991 million.
Global revenue grew 9.3% to $12.2 billion and average daily volume grew 5% to 15 millionpackages. UPS delivered 958 million packages in total in the quarter. The adjusted operatingmargin expanded 410 basis points to 12.4%, and the operating margin was 13.3% on a reported basis,the company said.
Based on the company’s performance, UPS has increased its guidance for 2010 adjusted dilutedearnings to a range of $3.48 to $3.54 per share, a 51%-to-53% increase over last year.
In the US domestic package business, the adjusted operating profit increased 77% to $911 millionon revenue growth of 6% to $7.3 billion. The margin expansion of 500 basis points was driven byvolume growth, improved yields and the benefits of more streamlined operations. Reportedoperating profit was $1.02 billion, a 98% increase.
Average daily package volume expanded 3.6% during the quarter due to growth in Ground and NextDay Air. Revenue per piece improved 4%, primarily through increases in base pricing and higherfuel surcharges, UPS noted.
The international package operating profit increased 34% to $419 million on an 11% increase inrevenue to $2.7 billion. Operating margin improved 280 basis points to 15.7%. Exportaverage daily volume increased 13%, outpacing the market, due to growth in all regions with Asialeading the way, up more than 30%. Non-US domestic volume increased 14% with strength acrossEurope, Canada and Mexico, the company said.
The Supply Chain and Freight division improved profits significantly in the third quarter.
Revenue grew 19% to $2.2 billion with the Forwarding business unit leading the way. Operatingprofit jumped 74% to $177 million, powered by Forwarding and Logistics. UPS Freight revenuegrew 14% due to improved yield and increases in gross weight hauled.
The operating margin for the segment increased 250 basis points to 8.0%. This marginexpansion was primarily driven by improved revenue management, increased tonnage and improvedoperational efficiencies in Forwarding and Logistics, according to the company.
“UPS once again exceeded expectations due to superior execution across all business units andour ability to provide solutions that create value for our customers,” stated chairman and CEOScott Davis. “We continue to deliver significant earnings growth and margin expansion in thecurrent economic environment. This is a true testament to what can be accomplished when you haveexcellent people, superior service and an unmatched global portfolio.”
“UPS generated superior performance across all segments,” added Kurt Kuehn, UPS’s chieffinancial officer. “This is a direct result of the successful execution of our long-rangestrategy.”
Looking ahead, Kuehn added: “I am confident in UPS’s ability to generate strong cash flow andcontinued earnings growth while investing in growth opportunities around the world. Based on theprojections of retailers and economists, we expect modest growth during the holiday peakseason. We are raising our full-year 2010 guidance with adjusted earnings per share expectedto grow more than 50% over last year. “
