UPS reports earnings growth of 3.9% in Q1

Atlanta-based supply chain giant United Parcel Service (UPS) announced improved earnings per share of US$1.32 in the first quarter of 2017, up by 3.9% versus the same period in 2016, with healthy revenue growth across all three segments.

The improved per-share result was due to a 22% increase in the supply chain and freight segment operating profit, strong underlying performance in the international segment, and solid results in the domestic segment, plus the favorable tax impact of adopting the new stock compensation accounting standard, the world’s largest package delivery company said in a statement.

The group’s total revenue climbed 6.2% to $15.315 billion for the period compared to the year-ago figure.

“Revenue came in strong this quarter with all segments adding to the topline,” said David Abney, UPS chairman and CEO.

The domestic segment benefitted from strong demand for e-commerce deliveries, and revenue was up 5% to $9.535 billion over Q1 2016 as B2C deliveries rose.

The international segment generated strong topline growth with increased demand for cross-border shipments, reporting revenue of $3.058 billion from $2.914 billion in the same quarter last year.

“Export shipment growth was strong across all UPS regions, as customers took advantage of our expanded portfolio and industry-leading customs brokerage solutions,” said UPS.

Meanwhile, the supply chain & freight unit continued to build momentum as operating profit jumped 22% on a 13% growth in revenue, reaching $2.722 billion in the first quarter of the year.

“We are extremely pleased with the growth and margin enhancing performance of the Supply Chain and Freight segment this quarter,” Abney said. “The team has been working on growth initiatives, cost reduction programs and business unit portfolio strategies to address unique market conditions for the last several quarters. These initiatives showed excellent progress.”

“First quarter results continue to show the benefit of our operating plan improvements across all business units,” said Richard Peretz, group chief financial officer. “Our current momentum, combined with accelerated investment initiatives, gives us confidence in our ability to attain our full-year guidance.”

UPS reaffirmed its 2017 adjusted diluted EPS guidance to be between $5.80 and $6.10, which includes more than $400 million, or $0.30 per share, of pre-tax currency headwinds.