Global express company UPS has released its results for the second quarter of 2005. For the three months ended June 30 the company reported revenue of $10.19 billion, an increase of 14.9% from the $8.87 billion reported last year. This in part reflected the acquisition of Menlo Worldwide Forwarding at the end of 2004. Consolidated operating profit rose 18.2% to $1.55 billion compared to $1.31 billion for the prior-year period. Net income totaled $986 million compared to the $818 million.

Its package division also reported strong growth. Average daily worldwide volume for the second quarter rose by 557,000 packages, or 4.1%, to 14.1 million. Worldwide average revenue per piece showed a 4.7% increase. All international regions saw double-digit growth in export volumes whilst in the United States there was an increase of 387,000 packages per day.

U.S. domestic package revenue grew 5.7% during the period to $6.94 billion on a volume growth of 3.2%. Operating profit rose 13.2% to $1.12 billion and operating margin increased 110 basis points to 16.1%. Pricing remained firm with an increase in average revenue per piece of 2.4%.

International package revenue increased 22.7% to $2 billion whilst operating profit climbed 41.3% to $397 million. Export volume grew by 18.2%, led by Asia export volume gains of 39.5%. China again drove Asia with export volume rising 99%. Average revenue per piece increased 9.4%.

Revenue for the supply chain solutions segment increased 84.9% to $1.25 billion primarily through the addition of Menlo Worldwide Forwarding. Profitability declined due to the expected costs of integrating the Menlo operation. However, the company expects $50-to-$100 million in synergies in 2006 and at least $200 million in 2007.

The strength of the second quarter and prospects for the remainder of the year have prompted UPS to update the 2005 outlook toward the higher end of its previous guidance.

Source: Transport Intelligence

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