International Growth Leads UPS Results
published: cw 18, 2007 in Logistics & ShippingStrong international performance and improvements in its supply chain and freight segments helped offset the impact of a slowing U.S. economy for UPS, according to CEO Mike Eskew. Aging aircraft and costs for a voluntary separation program diluted earnings.
UPS took an impairment charge of $221 million in the first quarter on certain Boeing 727 and 747 aircraft due to the acceleration of the planned retirement of those aircraft. Coupled with a charge to cover cash payouts and acceleration of stock compensation and certain retiree healthcare benefits for participating employees, the company saw an after-tax impact of $184 million.
Domestic package revenues rose in the first quarter to $7.55 billion, up from $7.46 billion in the first quarter of 2006. Average daily volumes remained at 13.3 million packages.
International package revenues were $2.39 billion, up from $2.16 billion in the prior year’s first quarter. Average daily volumes were up, reaching 1.8 million packages in the first quarter of 2007 vs. 1.7 million for the prior year period.
Supply chain and freight revenues rose slightly from $1.9 billion in 2006 to $1.97 billion in the 2007 first quarter. Profits recovered from a $25 million loss in 2006 to a $46 million profit for the 2007 period.
“The U.S. economy was softer than we originally anticipated, but continued rapid growth outside the United Sates and steady improvements from our Supply Chain and Freight segment are expected to produce a solid performance for the company in 2007,” said UPS CEO Mike Eskew.
Source: UPS
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