Deutsche Post Earnings Hurt by Costs at U.S. Express Unit

July 31, 2008 9:00 AM, EDT

Germany’s Deutsche Post AG, parent of U.S. parcel carrier DHL Express, said its second-quarter profit fell 11% to about $396 million, or 33 cents a share, on costs to revamp its parcel delivery business in North America, Bloomberg News Reported.

Deutsche Post, Bonn, Germany, said it spent about $73.7 in the second quarter on restructuring at the DHL Express U.S. Consequently, earnings before interest and taxes at the parent company sank 52% to about $48.6 million, Bloomberg said.

In May Deutsche Post said that it expects the U.S. Express unit to post a $1.3 billion loss in 2008 as a slumping U.S. economy curtails demand for air shipments and hurts the company's ability to compete with rivals FedEx and UPS, Bloomberg said.

Also in May, Deutsche Post announced that rival UPS would begin handled U.S. air-freight shipments for the beleaguered U.s. Express business.

DHL Americas, which includes Duetsche Post’s U.S. express operations, ranks No. 3 on the Transport Topics 100 list of the largest for-hire carriers in the United States and Canada.