UPS Malaysia records strong volume growth of nearly 35%
MALAYSIA, April 29, 2008 - UPS (NYSE:UPS) today reported
increased revenue in all segments with double-digit gains in both international
package and supply chain and freight operations. A sharp decline in U.S.
economic activity, however, led to a 9.4% drop in diluted earnings per share to
$0.87 compared to a prior-year adjusted $0.96.
In the Asia Pacific region, UPS's growth was driven by strong volume growth
of nearly 35% in Malaysia, over 15% in China and India as well as solid momentum
across other markets.
"UPS in Asia is performing well with double digit growth in the first
quarter. We successfully launched a new portfolio of enhanced services
such as UPS Paperlesssm Invoice and International Returns® which have
been well received in the marketplace, and raised the bar for premium delivery
services in the industry," said Derek Woodward, President, UPS Asia Pacific. "We
believe that in an environment of economic uncertainty, it is even more critical
today for companies to operate efficiently and better manage their supply chain
for greater competitive advantage. Our global network, technology and expertise
position us well to serve this need."
"Our strong volume growth this quarter is a testament of our efforts to carve
a niche within the industry in Malaysia. The roll out of eight new
products for the Asia Pacific region early this year displays our aim to
constantly deliver products that our customers need," said Vivian Chuah,
Managing Director of UPS Malaysia.
" Our emphasis is to continue to be very focused in enhancing value to our
customers and ensuring that we continue to expand our connectivity and service
options so our customers can become more competitive in global trade," added
Vivian.
In 2007, first quarter adjusted earnings per share excluded an impairment
charge related to aging jet aircraft and expenses for a voluntary separation
program. Including these charges, diluted earnings per share for the first
quarter of 2008 increased 11.5% over the $0.78 per share reported in the prior
year.
For the three months ended March 31, 2008, consolidated revenue increased
6.5% to $12.7 billion while consolidated average daily volume remained flat at
15.1 million packages per day. Consolidated average revenue per piece increased
5.4%.
Consolidated
Results 1Q
2008 1Q 2007 1Q 2007
adjusted
Revenue
$12.7 B $11.9 B
Operating
profit
$1.49 B $1.36
B $1.65 B
Operating
margin
11.8 % 11.4
% 13.8 %
Average volume per
day 15.13
M 15.13 M
Diluted earnings
per share
$0.87
$0.78 $0.96
During the first quarter, UPS delivered total consolidated volume of 968
million packages, unchanged from a year ago. Results were negatively
affected by a shift from premium products, the timing of the Easter holiday and
sharply rising fuel costs.
Cash Position
UPS ended the quarter with $1.48 billion in
cash and marketable securities. UPS also:
- Generated $1.62 billion in free cash flow, excluding an $850 million U.S.
federal tax refund related to the company's withdrawal from the Central States
Pension Plan.
- Purchased 17.4 million shares at a cost of $1.24 billion, leaving $8.9
billion of the authorization remaining for purchases UPS expects to complete by
the end of 2009.
- Paid dividends totaling $893 million. The dividend was increased 7% during
the quarter.
- Invested $661 million in capital expenditures.
U.S. Domestic Package 1Q
2008 1Q 2007 1Q 2007
adjusted
Revenue
$7.74 B $7.55 B
Operating
profit
$959 M $941
M $1.15 B
Operating
margin
12.4 % 12.5
% 15.3 %
Average volume per day 1
3.25 M 13.29
M
The slowing U.S. economy not only reduced average daily volume in the U.S. by
0.3% for the quarter but also contributed to a shift away from premium products.
Volume declined 3.8% for Next Day Air® and 2.9% for Deferred, while
increasing 0.3% for Ground. Revenue per piece remained stable for all
service levels, with consolidated revenue per piece increasing 2.7%.
The volume decrease, shift away from premium products and increased fuel
costs during the quarter contributed to the declines in operating profit and
margin.
International Package 1Q
2008 1Q 2007 1Q 2007
adjusted
Revenue
$2.76 B $2.39
B
Operating
profit
$421 M 371
M $440 M
Operating
margin
15.3 % 15.6
% 18.4 %
Average volume per
day 1.88
M 1.84 M
The segment's performance, as expected, was negatively impacted by the timing
of Easter, which resulted in two fewer operating days in Europe. The segment
also experienced higher fuel costs in the quarter. Export volume increased
approximately 10% in local operating days, which drove a 15.7% revenue increase.
U.S. export volume growth was strong, leading to a balanced global performance
with Asia, Europe and the U.S. each experiencing a double-digit increase.
Supply Chain and Freight
1Q 2008 1Q 2007 1Q 2007 adjusted
Revenue
$2.18 B $1.97 B
Operating
profit
$ 113 M $46
M $54 M
Operating
margin
5.2 % 2.3
% 2.7 %
Revenue increased almost 11%. Forwarding and Logistics revenue increased
12.8%, driven by the new air freight portfolio launched in January. LTL freight
revenue grew 4.1% and was constrained by the slowing U.S. economy. Operating
profit for the segment more than doubled.
Outlook
"We see no signs of economic strengthening in the
second quarter," said Kurt Kuehn, UPS's chief financial officer. "As a result,
the company expects earnings for the quarter in a range of $0.97 to $1.04 per
diluted share compared to $1.04 for the second quarter of 2007."
Commenting on annual earnings guidance, Kuehn said, "Most forecasters are
projecting that current anemic conditions will prevail for the remainder of the
year. Therefore, we are reducing our 2008 earnings expectations to a range of
$3.90 to $4.20 per diluted share.
"Despite the current state of the U.S. economy, the long-term growth
fundamentals for our industry and for UPS are very favorable," Kuehn added. "Our
international and supply chain businesses continue to offer great opportunity.
In the U.S., we're positioning our small package business to weather this
downturn and to be poised for economic recovery."
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. To get
UPS news direct, visit pressroom.ups.com/RSS.
|
|
 |
UPS Pressroom |
|
|
Read press releases, announcements and other media-related information about UPS.
|
|
 |
|
