Friday 21st Oct 2016 - Logistics Manager

Profits rise at UPS

Operating profit rose 2.3 per cent at UPS for the second quarter to $1.75 billion (£1.12bn), while sales were up 1.2 per cent to $13.35bn (£8.55bn).

The US domestic service was the strongest performer with operating profit rising by 12 per cent, but that was offset by tough international trading conditions which resulted in a 10 per cent fall in operating profit to $454m (£291m). Even so, said UPS, the operating margin of 15.1 per cent remained the best in the industry.

The supply chain and freight division saw sales fall 1.6 per cent to $2.28bn (£1.46bn) owing to slowing international air freight demand and lower pricing. However, the group said, operating profit margin reached a new high of 8.9 per cent as a result of effective revenue management and cost controls.

“Increasing uncertainty in the United States, continuing weakness in Asia exports and the debt crisis in Europe are impacting projections of economic expansion,” said UPS chief Scott Davis.

“Throughout its history, UPS has maintained its strength in all economic cycles and we are making the adjustments necessary to respond to today’s challenging conditions.”