China contributed to more than 30% growth this quarter and its YTD results soared to nearly 40%
Shanghai, Feb. 4, 2008 - UPS (NYSE: UPS) today reported
adjusted diluted earnings per share of $1.13 for its fourth quarter, an 8.7%
increase over last year. Revenue improved 6.1% driven by a double-digit
increase in international export volume, growth and firm pricing in the U.S.
package business and market-leading shipment gains at UPS Freight.
In Asia Pacific, UPS reported more than 15% growth for the quarter compared
to the same period last year driven by strong growth of more than 30% in China
and nearly 25% in India. For full year 2007, the Asia region delivered growth of
nearly 20%.
"We continued to improve service and coverage across the region and
successfully leveraged the intra-Asia network, where some of the world's
fastest-growing trade lanes are, to end the fiscal year with solid growth
figures." said Ken Torok, President of UPS Asia Pacific.
"Our 2007 roll-out of more customer-focused services, technology solutions
and product enhancements had proven to be strong drivers for profit. We also
reaped benefits from improving synergies between our supply chain and express
businesses. All these changes will act as a springboard for 2008, placing UPS in
a strong position for continued growth in Asia."
In December 2007, UPS announced an alliance with AFL in India to enhance
international export service there, increasing the number of access points for
Indian customers in the country to over 200. Almost two months before
that, UPS and Staples established two new co-branded stores, Staples UPS Express
in Beijing, China. The stores offer customers a convenient, one-stop location
for office supplies, document services and international shipping needs.
Richard Loi, senior vice president, UPS China and Asia Pacific added, "2007
was a milestone for UPS worldwide and in China. We celebrated 100 years of
service worldwide and aligned our operations in China to offer the full gamut of
supply chain services from guaranteed express, to freight, logistics and supply
chain services. We stayed focus on our customers and saw a jump of nearly 40%
growth for the past year. For this year, our customers in China can expect more
service enhancements and new products to help them move even faster and more
seamlessly around the world. As an Olympic sponsor, we are excited to help
deliver the best Games ever.
As the Chinese New Year golden week approaches, UPS is also geared to operate
as usual during the public holiday to meet customers' inbound and outbound
business needs.
Consolidated
Results 4Q
2007 Adjusted 4Q 2006
Revenue
$13.4
B
$12.6 B
Operating profit
(loss)
($4.25 B) $1.85
B $1.81 B
Operating
margin
(31.8%)
13.8%
14.3%
Average volume per
day 17.7
M
17.3 M
Diluted earnings (loss) per
share ($2.46)
$1.13
$1.04
The fourth quarter produced solid growth in spite of a sluggish U.S.
economy. Consolidated average daily package volume reached a record level
of 17.7 million pieces, an increase of 359,000 per day. Adjusted net
income for the quarter benefited from a lower effective tax rate.
For the full year, the company delivered a record 3.97 billion packages, an
average of 15.8 million per day. Consolidated revenue climbed 4.5% to $49.7
billion. Adjusted diluted earnings per share were $4.17, an increase of 8%
compared to 2006 and at the midpoint of UPS's earnings guidance for 2007.
Before adjustments, operating profit equaled $578 million and diluted earnings
per share totaled $0.42.
Cash Position
UPS ended 2007 in a strong financial
position. Even after the withdrawal payment to the Central States Pension
Plan, for the year the company:
- Generated cash from operations of $1.1 billion.
- Purchased 35.9 million shares for $2.6 billion.
- Paid $1.7 billion in dividends.
- Invested $2.8 billion in capital expenditures.
On Jan. 9, 2008, the company announced it had adopted a new financial policy
aimed at enhancing shareowner value. UPS intends to manage its balance
sheet to a target ratio within a range of 50-to-60% funds from operations to
total debt. The change "will enable us to make increased investments in
the business, pursue growth opportunities and undertake larger share
repurchases," said Kurt Kuehn, UPS's chief financial officer.
U.S.
Package 4Q
2007 4Q 2007 Adjusted 4Q
2006
Revenue
$8.31
B
$8.13 B
Operating profit
(loss) ($4.89
B) $1.21
B
$1.30 B
Operating
margin
(58.9%)
14.5%
15.9%
Average volume
per
15.6
M
5.4 M
Total U.S. daily volume increased 1.4%, with ground up 1.5% and Next Day
Air® gaining 2.2%. Pricing remained firm, improving 2.3%.
Adjusted operating profit declined as fuel prices increased rapidly during the
quarter.
During the peak holiday shipping season, deliveries exceeded 20 million
packages on five consecutive days and 22 million packages on two days.
International
Package 4Q
2007 4Q
2006
Revenue
$2.87 B $2.44 B
Operating
margin
19.4% 21.0%
Average
volume per day 2.1
M 2.0
M
Revenue increased 17.3% on daily export volume growth of 12.2%. Pricing
remained firm as operating profit increased to a record high of $557
million.
In January, the company also introduced two new services for international
shippers: paperless invoice* and international returns. UPS is the
first package carrier to offer customers a paperless international shipping
option as well as a package return capability to 98 countries and
territories. These services make it easier for customers to expand their
businesses to new markets around the globe.
*This service is not offering in
China.
Supply Chain and
Freight 4Q
2007 4Q
2006
Revenue
$2.22 B $2.06 B
Operating
profit
$82 M
($1 M)
Operating
margin
3.7%
--
Fourth quarter revenue for the segment improved 7.8% and operating profit
increased $83 million over last year's results. In a challenging heavy
freight environment, UPS Freight boosted revenue by 12.2% to $525 million with
less-than-truckload (LTL) shipments per day increasing 7.8%, well outpacing the
market. In the Forwarding and Logistics unit, revenue increased 6.4% to
$1.57 billion.
In January, UPS Freight announced it was guaranteeing its on-time performance
at no additional cost to customers using the LTL freight tariff in the
continental United States. UPS also launched a simplified air freight
services portfolio, including a substantially expanded express freight option
with guaranteed door-to-door service. The new air freight portfolio is
better aligned to meet market and customer needs, easier to access and use and
streamlined for more effective selling by the sales force.
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 www.ups.com.
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