UPS Net Income Up 15.9%, Revenue Rises 5%
[Stay on top of transportation news: Get TTNews in your inbox.]
UPS Inc. reported $1.75 billion in net income in the third quarter of 2019, up 15.9% from the same period a year ago, in an earnings statement released Oct. 22.
Earnings per share were $2.01, a 16.2% increase over the same period last year.
Revenue grew 5% to $18.3 billion from $17.44 billion the year before.
UPS also announced the departure of Chief Operating Officer Jim Barber, 59, effective at the end of December.
The global carrier was bolstered by growth in international and domestic business, with strong growth in the U.S. market, UPS reported.
Domestic revenue grew by 9.8% to $11.5 billion, up from $10.44 billion a year before. International revenue grew by less than 1%, creeping up to $3.49 billion, from $3.48 billion in the third quarter of 2018.
UPS said its Supply Chain and Freight unit dropped by 4.5%, to $3.37 billion from $3.53 billion, but operating profit from that segment grew by 1.2%, to $245 million from $242 million a year earlier.
UPS officials said that segment’s performance was driven by small- and medium-size customers that generate higher quality revenue. UPS said it also was able to execute cost management throughout its network.
“Our results reflect significant progress from our transformation initiatives, and our ability to generate growth and deliver increased efficiencies in a dynamic economic environment,” Chairman and CEO David Abney said. “As we recently announced, we continue to forge new partnerships and create innovative solutions to accelerate growth in the most attractive opportunities.”
Chief Financial Officer Brian Newman said the company will continue to improve network efficiencies and explore growth opportunities well in the future.
Other UPS News
The company reaffirmed its full-year earnings guidance, estimating a per-share range of $7.45 to $7.75 for 2019.
UPS officials said they do not expect economic deterioration regarding global trade uncertainty or U.S. industrial weakness.
UPS also said its capital investments have been reduced in 2019 and 2020 by about $500 million each year. Network automation targets and other transformation goals remain unchanged, the company said.
In September, UPS said it was hiring about 100,000 seasonal workers to prepare for what it believes will be a record-setting holiday season.
The company announced Barber’s retirement during the earnings announcement. His pending departure will cap a 35-year career with the company, UPS said. Barber came aboard as a delivery driver in 1985 and rose through positions of increasing responsibility.
As COO, Barber oversees the global small package, freight, supply chain and freight forwarding units.
“[Jim Barber] guided our international teams to strong growth and performance for successive years, even when market conditions were challenging,” Abney said. “More recently, he built a strong team and helped them implement plans for improved performance in our domestic and supply chain segments, as shown in our operating results.”
Barber is credited for leading UPS’ international growth in both mature and emerging Asian and European markets, while more recently prioritizing investments to capture opportunities in south-to-south trade in the Indian subcontinent, the Middle East and Africa, UPS said.
Barber serves as a trustee of The UPS Foundation, and on the board of the Folks Center for International Business at the University of South Carolina. In 2018, he was awarded the British-American Business Corporate Citizenship Award, UPS said.
UPS ranks No. 1 on the Transport Topics Top 100 list of the largest for-hire carriers in North America. Headquartered in Atlanta, UPS serves more than 220 countries and territories worldwide.
Want more news? Listen to today's daily briefing: