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UPS posts $1.1bn net income, Q1 revenue up

UPS, a global leader in logistics sector, has reported a net income of $1.11 billion for the first quarter, compared to $1.345 billion for the same period in 2018.

The company’s revenues for the Q1 reached $17.160 billion, in comparison to $17.113 billion for the same period last year. The diluted earnings per share was at $1.28 during the first quarter of this year, compared to $1.55 in the same period last year, said a statement from UPS.

The company’s Q1 earnings are strengthened by higher-quality revenue and benefits from investments in its global network.

First-quarter adjusted results exclude a pre-tax charge of $123 million, or $0.11 per share after tax, due to transformation-related charges, it said.

These projects will create efficiencies across the enterprise and produce higher-quality revenue growth.    
Chairman and CEO David Abney said: "The first quarter marked a good start to the year, as we executed against our strategy and generated solid performance across our business."

"Our transformation initiatives are enhancing revenue quality and creating network efficiencies that will increase our long-term earnings power. We are on a path to take advantage of growth opportunities and enhance our future performance," he added.

During the first quarter of 2019:

The company’s results reflect the impact of the severe winter weather in the US;
Also, there was one less operating day in the first quarter of 2019 than a year ago, and an impact of Easter moving to mid-April;
UPS’ capital expenditures were $1.5 billion to support network enhancements;
The company continued to reward shareowners with strong dividend yields, paying dividends of $867 million, an increase of 5.5 per cent per share over the prior-year period;
The company repurchased 2.4 million shares for approximately $250 million.

Additionally, UPS revealed that the total revenues for the US domestic segment during Q1 of 2019 reached $10.480 billion, an increase of 2.5 per cent, compared to $10.227 billion during the same period last year. Its operating profit was $666 million for the first quarter, in comparison to $756 million in the previous year.

The company stated that the investments in new automated hubs contributed to improvements in operational measures including productivity gains and slower growth in unit costs.

Abney said: “We are bending the cost curve in our US domestic segment as highly automated hubs come online, producing improved productivity benefits. These improvements contributed to the segment’s performance in the quarter and will continue to gain momentum going forward.”

UPS said that its international segment reported first-quarter revenues of $3.459 billion, in comparison to $3.533 billion for the same period in 2018. It also reported an operating profit of $528 million, compared to $594 million for the same period last year.

Also, the company’s supply chain and freight segment reported a revenue of $3.221 billion for the first quarter of 2019, compared to $3.353 billion during 2018. The segment’s operating profit totalled at $200 million, in comparison to $170 million during the same period last year.

Abney continued: “Supply chain and freight generated excellent operating profit this quarter, with strong contributions from Coyote and the rest of our Forwarding unit.”

“We continue to execute our asset-light strategies, while providing our customers with the high-quality service they expect,” he added. – TradeArabia News Service

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