Express giant UPS recorded improvements in revenues and net profits in the first quarter of the year, but operating profits declined partly due to harsh winter weather.
The Atlanta-headquartered firm saw revenues increase by 10.3% year on year to $17.1bn driven by its supply chain and freight, and international package businesses.
Net income for the quarter improved by 15.4% on a year earlier to $1.3bn but operating profits were down 6% to $1.5bn as a result of declines at its domestic package business.
Drilling down to its individual businesses, the US domestic segment saw revenues increase by 7.2% to $10.2bn on the back of strong demand, while operating profits took a $194m hit to decline to $756m as a result of headwinds from severe winter weather of $85m, Saturday deployment, network projects and higher pension expenses.
Its international segment saw revenues increase by 14.9% to $3.5bn and operating profits were up 14.7% to $594m.
Revenues and profits improved on the back of currency effects, increased demand in premium products and increased export shipments.
Finally, the company’s supply chain and freight business saw revenues increase by 15.6% year on year to $3.3bn and operating profits were up 14.1% to $170m.
“The forwarding business led all units with 27% revenue growth, as revenue management initiatives and stable market conditions drove top-line gains,” UPS said.
“Top-line growth in our business was strong across all business segments, reflecting the power of UPS’s global solutions and continued favorable economic conditions,” said UPS chairman and chief executive David Abney.
“When combined with our transformation initiatives, these favorable trends position UPS for strong returns going forward.”
Read more express industry news
