ATLANTA, April 20, 2006 – UPS (NYSE:UPS) today reported earnings per diluted share of $0.89, up 14.1% over the prior year. Results were driven by a 9% increase in global small package volume or 1.24 million packages per day, outpacing worldwide market growth.
The consolidated results for the period included:
- Revenue grew 16.5% to $11.5 billion.
- Operating profit increased 12.3% to $1.6 billion.
- Net income increased 10.5% to $975 million.
- Free cash flow improved to $1.9 billion.
Solid fundamentals are delivering healthy cash flow. Free cash was used to buy back more than 11 million shares in an on-going repurchase program. Dividends were increased by 15% and are up 81% over the last three years.
“This was a quarter of outstanding growth that resulted in strong returns and excellent cash flow,” said Mike Eskew, UPS chairman and CEO. “To drive future results, we will continue to invest in our network, technology and products to bring even more value to the customer.”
Highlights by segment for the first quarter included:
U.S. Package
- Revenue grew 9.6% to $7.5 billion.
- Operating profit increased 15.3% to $1.19 billion.
- Operating margin improved 80 basis points to 15.9%.
- Volume grew 6.8% in total, or 848,000 packages per day.
Revenue gains were a result of robust growth across all products combined with firm pricing. Product growth was paced by a 9.3% increase in Next Day Air® volume coupled with a 10.8% increase in deferred air volume. Average daily ground volume rose 6.2%, or almost 650,000 packages per day.
During the quarter, UPS accelerated the speed of its U.S. ground network, enhanced its 2nd Day Air A.M.® products and launched extensive training of its sales teams in selling the freight portfolio.
International Package
- Revenue grew 17.3% to $2.16 billion.
- Operating profit increased 13.5% to $395 million.
- Operating margin remained strong at 18.3%.
- Volume grew 29.1% to 1.7 million packages per day.
Export volume growth was excellent with a 16.3% increase, reflecting strong performance in all major regions of the world. Non-U.S. domestic volume climbed 38.3%, aided by acquisitions.
Recently, UPS added important international flights to and from China and expanded its operations there. The company also enhanced Trade Direct service between the United States, Canada and Europe and extended its unique Web-based multi-location shipping system, UPS CampusShip™, to another 18 countries and territories.
Supply Chain and Freight
- Revenue grew 53.9% to $1.9 billion, driven primarily by acquisitions.
- Operating profit declined $34 million.
Freight forwarding and logistics operating profit was impacted by increased expenses and lost revenue due to the integration of the former Menlo Worldwide Forwarding unit. However, these results were somewhat offset by solid less-than-truckload revenue and shipment growth in the ground freight operations.
Outlook
“No company in this industry is better positioned to capitalize on the growth opportunities we see around the world,” said Chief Financial Officer Scott Davis. As a result, UPS is projecting diluted earnings per share in a range of $0.97 to $1.01 in the second quarter compared to the $0.88 reported during the prior-year period. “We are reaffirming our full-year 2006 guidance,” Davis added. “UPS continues to expect an increase in diluted earnings per share of 11-to-16%, consistent with the company’s historical growth rate.”
UPS is the world’s largest package delivery company and a global leader in supply chain services, offering an extensive range of options for synchronizing the movement of goods, information and funds. Headquartered in Atlanta, USA, UPS serves more than 200 countries and territories worldwide. UPS's stock trades on the New York Stock Exchange (UPS) and the company can be found on the Web at
www.ups.com.
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For more information, please contact:
Ilse de Sain, Edelman,
ilse.desain@edelman.com or
Inge van Langelaar, Edelman,
inge.vanlangelaar@edelman.com020 – 30 10 980
Except for historical information contained herein, the statements made in this release constitute forward-looking statements within the meaning of Section 27A of the US Securities Act of 1933 and Section 21E of the US 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 US Securities and Exchange Commission, which discussions are incorporated herein by reference.