Volumes posed a challenge for UPS in the second quarter of this year, though results were bolstered slightly by the performance of the supply chain solutions division.
UPS has announced second quarter consolidated revenues of $21.8bn, a 1.1% decrease from the second quarter of 2023.
Consolidated operating profit was $1.9bn, down 30.1% compared to the second quarter of 2023, and down 29.3% on an adjusted basis.
In the international segment, revenue decreased 1%. UPS said this was "driven primarily by a 2.9% decrease in average daily volume".
Europe volumes grew sharply, but Asia volumes plateaued in the last part of the second quarter, shows UPS' earnings document for the quarter.
The express giant said that in the US domestic segment, revenue decreased 1.9%, "driven by a 2.6% decrease in revenue per piece due primarily to changes in product mix".
Meanwhile, in the supply chain solutions division, revenue increased 2.6% "due primarily to growth in logistics, including healthcare".
UPS noted in its earnings document that e-commerce-related airfreight demand contributed to robust results for the supply chain solutions division: "Strong e-commerce demand in international air freight drove increase in volume and revenue."
“I want to thank all UPSers for their hard work and efforts in the second quarter,” said Carol Tomé, UPS chief executive. “This quarter was a significant turning point for our company as we returned to volume growth in the U.S., the first time in nine quarters.
"As expected, our operating profit declined in the first half of 2024 from what we reported last year. Going forward we expect to return to operating profit growth.”
Brian Dykes, chief financial officer, said: " Outside of the U.S., we saw pockets of demand improve in each export region, driving growth in many of our more profitable lanes.”
In addition to announcing its second quarter results, UPS has entered into an agreement to acquire Mexican express delivery company Estafeta, including a fleet of six aircraft.
UPS has struggled with business growth recently. The company recorded consolidated revenue of $21.7bn in the first three months of this year, a 5.3% fall on its performance in the first quarter of 2023.
Prior to this, at the end of January, UPS announced it would cut more than 12,000 jobs as part of efforts to reduce costs in light of continuing market weakness.
For 2024 overall, UPS said consolidated revenue is expected to be approximately $93bn and consolidated adjusted operating margin is expected to be approximately 9.4%.
https://www.aircargonews.net/business/finance/ups-still-struggles-with-revenues-in-q4/
