Severe weather conditions reduced earnings in the first quarter of this year for United Parcel Service (UPS).
The Atlanta-based packaging service giant said earnings per share fell to US$0.98, a $0.06 decline from first quarter 2013 results. Operating profit for the quarter was $1.5 billion, down $106 million from the prior-year’s adjusted results.
“Unusually harsh weather weighed on operating profit by about $200 million, due to increased expenses and slower revenue growth,” a company statement read.
Average daily shipments in the U.S. climbed 4.2 percent, driven primarily by large e-commerce shippers using lightweight deferred shipping solutions.
The international segment’s operating margin expanded to 14 percent on daily volume growth of 7.9 percent. Supply chain and freight experienced improved operating profit and margin expansion.
“Much of the U.S. economy was negatively affected by the severe weather conditions in the first quarter, resulting in lower UPS operating results versus the prior year,” said Scott Davis, group chairman and CEO. “International and the Supply Chain and Freight segment benefitted from positive momentum during the quarter as customers utilized the strategic investments made by UPS to strengthen our portfolio.”
Export shipments climbed 7.7 percent, driven by 15 percent growth in Europe and modest gains in Asia and the Americas.
Average revenue per package declined 2.1 percent due to product mix changes as non-premium export products jumped almost 13 percent, overshadowing improved growth in premium products.
“During the quarter, the momentum of the underlying business was masked by the disruption of inclement weather,” said Kurt Kuehn, chief financial officer. “We are encouraged by the positive trends in our business and expect the remainder of the year to perform as we originally guided. However, due to the challenging start to 2014, we anticipate diluted earnings per share to be at the low end of our full-year guidance range of $5.05 to $5.30.”
Photo: Aero Icarus
