Big Beer Belly
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UPS 1st Quarter Shows Strong 16% Income Gain
Thursday April 21, 8:01 am ET
ATLANTA--(BUSINESS WIRE)--April 21, 2005--Paced by its growing international
package operation, UPS (NYSE:UPS - News) today reported a strong 16.2% gain
in net income for the first quarter of 2005.
Consolidated revenue for the three months ended March 31, 2005, rose 10.8%
to $9.89 billion, reflecting in part the addition of revenue from the
recently acquired Menlo Worldwide Forwarding. International package revenue
climbed 13% while U.S. package revenue rose 2.8%.
Operating profit rose 13.8% to $1.39 billion compared to $1.22 billion for
the prior-year period. International operating profit jumped 25.6% to $348
million, while U.S. domestic operating profit increased almost 13% to $1.03
billion.
Operating profit for the supply chain solutions segment was reduced by
integration costs from the December acquisition of Menlo Worldwide
Forwarding. The former Menlo unit now is a key part of an aggressive push by
UPS Supply Chain Solutions into the time-definite heavy air freight
business.
UPS also announced a change to its management bonus program, moving from a
fixed profit-sharing plan to a performance-based plan. This change had a
positive impact on compensation expense for the quarter of $0.045 per
diluted share, and will have comparable benefits for the rest of the year.
As a result, the company raised its guidance for 2005 full-year earnings
growth to the range of 16-to-20% over the adjusted $2.90 reported for 2004.
(The 2004 diluted EPS on a GAAP basis was $2.93.) Previous guidance was
13-to-17%.
For the three months ended March 31, net income totaled $882 million, a gain
of 16.2% compared to the $759 million reported for the period in 2004.
Earnings per diluted share were $0.78, up 16.4% from the $0.67 reported in
the prior year.
Consolidated worldwide package volume for the first quarter rose by 3
million pieces to 885 million, while average daily volume increased by
38,000 packages per day to 13.82 million. Export volume was up 9.3%, while
U.S. domestic volume was essentially flat at an average 12.5 million per
day.
"We had a great start to the year. The first quarter set the pace for UPS to
generate earnings in 2005 at the higher end of our historical range," said
Scott Davis, UPS's chief financial officer. "We grew our international
operating profit by more than 25% and we did a very good job of managing our
costs. Our cost initiatives are taking hold and we are benefiting from the
deployment of package flow technology in the U.S. operation. There is strong
momentum throughout all three business units."
Highlights by segment for the first quarter included:
a.. International package revenue increased 13% to $1.84 billion.
Operating profit climbed 25.6% to $348 million. Asia export volume increased
36% with export volume doubling out of China. Operating margin increased 190
basis points to 18.9%.
b.. U.S. domestic package revenue grew 2.8% during the period to $6.8
billion. Operating profit rose 12.7% to $1.03 billion and operating margin
was 15.1%. Average daily volume in the U.S. grew 0.1% for the quarter.
Yields remained strong, with an increase in revenue per piece of 2.6% for
all U.S. domestic products.
c.. Revenue for the supply chain solutions segment increased 86% to $1.23
billion with the addition of Menlo Worldwide Forwarding. Freight services
and logistics accounted for $1.12 billion of that total. Revenue growth for
the segment was on track and hit its target for the quarter. Profitability
was reduced by the integration of Menlo.
"We are confident we've laid the foundation to accelerate volume growth in
the U.S. going forward," added Davis. "Our efforts to better sell to
mid-sized customers are gaining traction and we made good strides in
connecting more customers to UPS through electronic shipping systems."
Davis said the company expects solid growth in 2005. The international
segment should maintain its exceptional performance with strong export
volume growth. U.S. domestic volume growth should be 2-to-3% for the year,
and the Menlo acquisition is expected to be slightly accretive to earnings
for the year.
For the second quarter, UPS is projecting diluted earnings per share in a
range of $0.82 to $0.87 compared to the $0.72 reported during the prior-year
period. The company anticipates improving volume trends in its U.S. domestic
business, with 2% growth expected in the second quarter.
UPS is the world's largest package delivery company and a global leader in
supply chain services, offering an extensive range of options for
synchronizing the movement of goods, information and funds. Headquartered in
Atlanta, Ga., UPS serves more than 200 countries and territories worldwide.
UPS's stock trades on the New York Stock Exchange (UPS) and the company can
be found on the Web at UPS.com.
Thursday April 21, 8:01 am ET
ATLANTA--(BUSINESS WIRE)--April 21, 2005--Paced by its growing international
package operation, UPS (NYSE:UPS - News) today reported a strong 16.2% gain
in net income for the first quarter of 2005.
Consolidated revenue for the three months ended March 31, 2005, rose 10.8%
to $9.89 billion, reflecting in part the addition of revenue from the
recently acquired Menlo Worldwide Forwarding. International package revenue
climbed 13% while U.S. package revenue rose 2.8%.
Operating profit rose 13.8% to $1.39 billion compared to $1.22 billion for
the prior-year period. International operating profit jumped 25.6% to $348
million, while U.S. domestic operating profit increased almost 13% to $1.03
billion.
Operating profit for the supply chain solutions segment was reduced by
integration costs from the December acquisition of Menlo Worldwide
Forwarding. The former Menlo unit now is a key part of an aggressive push by
UPS Supply Chain Solutions into the time-definite heavy air freight
business.
UPS also announced a change to its management bonus program, moving from a
fixed profit-sharing plan to a performance-based plan. This change had a
positive impact on compensation expense for the quarter of $0.045 per
diluted share, and will have comparable benefits for the rest of the year.
As a result, the company raised its guidance for 2005 full-year earnings
growth to the range of 16-to-20% over the adjusted $2.90 reported for 2004.
(The 2004 diluted EPS on a GAAP basis was $2.93.) Previous guidance was
13-to-17%.
For the three months ended March 31, net income totaled $882 million, a gain
of 16.2% compared to the $759 million reported for the period in 2004.
Earnings per diluted share were $0.78, up 16.4% from the $0.67 reported in
the prior year.
Consolidated worldwide package volume for the first quarter rose by 3
million pieces to 885 million, while average daily volume increased by
38,000 packages per day to 13.82 million. Export volume was up 9.3%, while
U.S. domestic volume was essentially flat at an average 12.5 million per
day.
"We had a great start to the year. The first quarter set the pace for UPS to
generate earnings in 2005 at the higher end of our historical range," said
Scott Davis, UPS's chief financial officer. "We grew our international
operating profit by more than 25% and we did a very good job of managing our
costs. Our cost initiatives are taking hold and we are benefiting from the
deployment of package flow technology in the U.S. operation. There is strong
momentum throughout all three business units."
Highlights by segment for the first quarter included:
a.. International package revenue increased 13% to $1.84 billion.
Operating profit climbed 25.6% to $348 million. Asia export volume increased
36% with export volume doubling out of China. Operating margin increased 190
basis points to 18.9%.
b.. U.S. domestic package revenue grew 2.8% during the period to $6.8
billion. Operating profit rose 12.7% to $1.03 billion and operating margin
was 15.1%. Average daily volume in the U.S. grew 0.1% for the quarter.
Yields remained strong, with an increase in revenue per piece of 2.6% for
all U.S. domestic products.
c.. Revenue for the supply chain solutions segment increased 86% to $1.23
billion with the addition of Menlo Worldwide Forwarding. Freight services
and logistics accounted for $1.12 billion of that total. Revenue growth for
the segment was on track and hit its target for the quarter. Profitability
was reduced by the integration of Menlo.
"We are confident we've laid the foundation to accelerate volume growth in
the U.S. going forward," added Davis. "Our efforts to better sell to
mid-sized customers are gaining traction and we made good strides in
connecting more customers to UPS through electronic shipping systems."
Davis said the company expects solid growth in 2005. The international
segment should maintain its exceptional performance with strong export
volume growth. U.S. domestic volume growth should be 2-to-3% for the year,
and the Menlo acquisition is expected to be slightly accretive to earnings
for the year.
For the second quarter, UPS is projecting diluted earnings per share in a
range of $0.82 to $0.87 compared to the $0.72 reported during the prior-year
period. The company anticipates improving volume trends in its U.S. domestic
business, with 2% growth expected in the second quarter.
UPS is the world's largest package delivery company and a global leader in
supply chain services, offering an extensive range of options for
synchronizing the movement of goods, information and funds. Headquartered in
Atlanta, Ga., UPS serves more than 200 countries and territories worldwide.
UPS's stock trades on the New York Stock Exchange (UPS) and the company can
be found on the Web at UPS.com.
