International Profit Up 45%; Margin Expansion in all Segments
Atlanta, April 27, 2010
As previously announced, UPS (NYSE:UPS) posted adjusted diluted earnings per
share of $0.71 for the first quarter of 2010, a 37% gain over the adjusted $0.52
for the prior-year period. Revenue increased 7% to $11.7 billion. Growth in the
international package and supply chain businesses, yield improvement and
increased operating leverage resulted in margin expansion in all business
segments.
On a reported basis, diluted earnings per share for the first quarter of 2010
were $0.53 compared to $0.40 the prior year, a 33% improvement.
"UPS's global strategy clearly proved beneficial in the first quarter," said
Scott Davis, UPS's chairman and CEO. "Our broad product portfolio and
solutions-based approach to customers' logistics needs enabled the company to
capture new business. In addition, our worldwide integrated network
generated significant margin expansion. With global economies showing signs of
recovery and UPS's strong start to 2010, we are optimistic about this year and
the future."
| |
|
Adjusted |
|
Adjusted |
| Consolidated Results |
1Q 2010 |
1Q 2010 |
1Q 2009 |
1Q 2009 |
| Revenue |
$11.7 B |
|
$10.9 B |
|
| Operating profit |
$1.0 B |
$1.2 B |
$718 M |
$899 M |
| Operating margin |
8.9% |
10.0% |
6.6% |
8.2% |
| Average volume per day |
14.93 M |
|
14.54 M |
|
| Diluted earnings per share |
$0.53 |
$0.71 |
$0.40 |
$0.52 |
For the three months ended March 31, 2010, consolidated volume totaled
940 million packages, a 3% increase. Average revenue per piece also
increased 3%, reflecting general rate increases and higher fuel surcharges.
In the quarter, UPS incurred a $98 million pre-tax restructuring charge
related to the reorganization of the U.S. Domestic Package segment; a $38
million pre-tax loss on the sale of a specialized transportation business in its
supply chain unit in Germany, as well as a $76 million non-cash charge to income
tax expense resulting from a change in the tax filing status of a German
subsidiary. The impact of these charges reduced net income by $175 million
and diluted earnings per share by $0.18.
In the prior-year quarter, UPS took a $181 million non-cash impairment charge
on its DC-8 fleet, which reduced net income by $116 million, or $0.12 per
share.
Cash Position
In the quarter UPS generated $1.3 billion
in free cash flow. The company also:
- Paid dividends totaling $470 million.
- Invested $280 million in capital expenditures.
- Repurchased more than 4 million shares at a cost of $260 million.
- Ended the quarter with $3.1 billion in cash and marketable
securities.
| |
|
Adjusted |
|
Adjusted |
| U.S. Domestic Package |
1Q 2010 |
1Q 2010 |
1Q 2009 |
1Q 2009 |
| Revenue |
$7.10 B |
|
$6.95 B |
|
| Operating profit |
$562 M |
$660 M |
$384 M |
$565 M |
| Operating margin |
7.9 % |
9.3% |
5.5% |
8.1% |
| Average volume per day |
12.73 M |
|
12.68 M |
|
Adjusted operating profit increased 17% on revenue improvement of 2% due
to yield gains and network efficiencies, resulting in a margin expansion of 120
basis points. On a reported basis, operating profit increased 46%.
Average volume per day was up slightly during the quarter, the first
year-over-year growth in two years. Revenue per piece improved 2% due to
increases in base pricing and higher fuel surcharges, partially offset by
changes in product mix between ground and air services.
During the quarter, UPS opened the second phase of its Worldportsm
air hub expansion, improving sort capacity from 350,000 to 416,000 packages per
hour. The expansion helps further optimize the UPS air network, enabling
the use of larger, more fuel efficient aircraft.
In addition, the company introduced UPS Smart Pickupsm, an
industry-first application that combines customer and operational systems to
ensure a driver stops to pick up a package only when a customer has prepared a
package for shipment. The process is easy, automated and transparent to the
customer and will allow UPS to eliminate an estimated 8 million miles of driving
annually.
| International Package |
1Q 2010 |
1Q 2009 |
| Revenue |
$2.64 B |
$2.24 B |
| Operating profit |
$427 M |
$294 M |
| Operating margin |
16.2 % |
13.1 % |
| Average volume per day |
2.20 M |
1.86 M |
The International Package segment posted an 18% jump in revenue with
operating profit increasing 45%. Average daily volume also increased 18% during
the quarter, outpacing market growth once again with all regions contributing.
Export volume increased more than 9% due to strong growth in all major trade
lanes.
Non-U.S. domestic volume increased 24%, driven by an acquisition in Turkey in
the third quarter of last year, as well as 13% organic growth, powered by
strength in core European countries.
In the quarter, UPS began operating its new intra-Asia air hub in Shenzhen,
China, slashing at least a day off shipment time-in-transit. The company
also opened a state-of-the-art facility at the Calgary International Airport to
expedite international shipments.
| |
|
Adjusted |
|
| Supply Chain and Freight |
1Q 2010 |
1Q 2010 |
1Q 2009 |
| Revenue |
$1.99 B |
|
$1.75 B |
| Operating profit |
$53 M |
$91 M |
$40 M |
| Operating margin |
2.7% |
4.6% |
2.3% |
Each business unit in the segment recorded revenue gains, with Forwarding
and Logistics up 16%. Adjusted operating profit for the segment more than
doubled led by gains in Logistics, which continued to benefit from strength in
the high-tech and healthcare sectors. Reported operating profit improved
33%.
During the quarter, the Logistics business unit expanded its service parts
logistics (SPL) network to 89 cities in China. These facilities provide
same-day or next-business-day delivery of critical parts, particularly for
high-tech, medical equipment and aerospace customers. UPS's SPL network is
the world's largest with service in 120 countries.
In a difficult market environment, UPS Freight posted a 6% LTL revenue gain
driven by a 10% increase in revenue per hundredweight.
Outlook
"UPS achieved significant operating leverage in
an improving global economic environment," said Kurt Kuehn, UPS's chief
financial officer. "In the first quarter we realized the benefits from the
hard work we have been doing to streamline our operations. First quarter
results exceeded our expectations and set a strong foundation for the rest of
2010.
"We expect first quarter trends to continue through the year, producing
revenue growth and additional operating leverage," he added. "Therefore,
UPS recently raised adjusted earnings guidance for the year to a range of $3.05
to $3.30 per diluted share, an increase of 32% to 43% over adjusted 2009
results.
"Going forward, we're determined to sustain the enhancements we've made to
our cost structure," Kuehn continued. "We'll continue to invest for the
future while remaining focused on disciplined, profitable growth. We're
very confident that our diversified, global product portfolio will help us
capitalize on the growth opportunities ahead."
EDITOR'S NOTE:
UPS Chairman and CEO Scott Davis and CFO
Kurt Kuehn will discuss first quarter results with investors and analysts during
a conference call at 8:30 a.m. EDT today. That call is open to listeners
through a live Webcast. To access the call, go to www.investors.ups.com and click on
"Earnings Webcast."
UPS routinely posts investor announcements on its web site - www.investors.ups.com - and encourages
those interested in the company to check there frequently.
We supplement the reporting of our financial information determined under
generally accepted accounting principles ("GAAP") with certain non-GAAP
financial measures, including, as applicable, "as adjusted" operating profit,
operating margin, pre-tax income, net income and earnings per share. The
equivalent measures determined in accordance with GAAP are also referred to as
"reported" or "unadjusted". We believe that these adjusted measures provide
meaningful information to assist investors and analysts in understanding our
financial results and assessing our prospects for future performance. We
believe these adjusted financial measures are important indicators of our
recurring operations because they exclude items that may not be indicative of or
are unrelated to our core operating results, and provide a better baseline for
analyzing trends in our underlying businesses. Furthermore, we use these
adjusted financial measures to determine awards for our management personnel
under our incentive compensation plans.
In the first quarter of 2010, we recorded a $98 million pre-tax restructuring
charge in our U.S. Domestic Package operations related to the reorganization of
our domestic management structure. We also incurred a $38 million pre-tax
loss on the sale of a specialized transportation business in Germany in our
Supply Chain & Freight segment. Additionally, we recorded a $76 million
charge to income tax expense, resulting from a change in the filing status of a
German subsidiary. In the first quarter of 2009, we recorded a $181 million
pre-tax impairment charge ($116 million after tax) related to our
McDonnell-Douglas DC-8-71 and DC-8-73 aircraft fleets. We presented first
quarter 2010 and 2009 operating profit, operating margin, pre-tax income, net
income and earnings per share excluding the impact of these items as we believe
these adjusted measures better enable shareowners to focus on period-over-period
operating performance. The underlying matters that produced these charges were
unique, and we do not believe they are reflective of the types of charges that
will affect future results.
Because non-GAAP financial measures are not standardized, it may not be
possible to compare these financial measures with other companies' non-GAAP
financial measures having the same or similar names. These adjusted
financial measures should not be considered in isolation or as a substitute for
GAAP operating profit, operating margin, net income and earnings per share, the
most directly comparable GAAP financial measures. These non-GAAP financial
measures reflect an additional way of viewing aspects of our operations that,
when viewed with our GAAP results and the preceding reconciliations to
corresponding GAAP financial measures, provide a more complete understanding of
our business. We strongly encourage investors to review our financial statements
and publicly-filed reports in their entirety and not to rely on any single
financial measure.
Except for historical information contained herein, the statements made in
this release constitute forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. Such forward-looking statements, including statements regarding the
intent, belief or current expectations of UPS and its management regarding the
company's strategic directions, prospects and future results, involve certain
risks and uncertainties. Certain factors may cause actual results to
differ materially from those contained in the forward-looking statements,
including economic and other conditions in the markets in which we operate,
governmental regulations, our competitive environment, strikes, work stoppages
and slowdowns, increases in aviation and motor fuel prices, cyclical and
seasonal fluctuations in our operating results, and other risks discussed in the
company's Form 10-K and other filings with the Securities and Exchange
Commission, which discussions are incorporated herein by reference.
About UPS UPS (NYSE:UPS) is the world's largest package
delivery company and a global leader in supply chain and freight services. With
more than a century of experience in transportation and logistics, UPS is a
leading global trade expert equipped with a broad portfolio of solutions.
Headquartered in Atlanta, Ga., UPS serves more than 200 countries and
territories worldwide. The company can be found on the Web at UPS.com and its corporate blog can be found at blog.ups.com. To get UPS news direct, visit pressroom.ups.com/RSS.
|
|
 |
Espace presse UPS |
|
|
Communiqués de presse, annonces et autres informations sur UPS provenant des médias.
|
|
 |
|
Récapitulatif du compte