UPS Inc. posted second-quarter net income of $1.23 billion, or $1.35 per share, helped by stronger results in the international sector.
The results represented a 9.9% increase over last year’s second quarter, when net income was $1.11 million, or $1.21, excluding a $665 million charge for pension-related costs. Revenue dipped 1.2% to $14.1 billion, affected by fuel surcharge and currency factors.
Shipment totals rose 2.1% to 1.1 billion packages.
“We are making good progress this year,” CEO David Abney said. “The strong momentum in our international segment is expected to continue.”
In domestic package, the largest unit, profits rose 3% to $1.2 billion before interest and taxes, and revenue rose 1.6% to $8.81 billion. Deferred business rose, but the growth pace of business to consumer shipments slowed.
International operating profit increased $81 million, or 18%, to $552 million over the adjusted results. Higher volume and better pricing improved profit margins, helped by intra-Europe business growth. Revenue fell 6.4% to $3 billion, hurt by lower fuel surcharge collections.
Profit at the supply chain and freight business rose 18% to $207 million, helped by increased earnings in the forwarding business tied to pricing improvements. That unit’s revenue dropped 4.5% to $2.24 billion.
Less-than-truckload carrier UPS Freight raised revenue per 100 pounds of freight of 1.4%, but revenue slipped 2.5% due to slower market growth and a drop in fuel surcharge collections. Tonnage declined.
UPS maintained its 2015 forecast of 6% to 12% profit growth per share of $5.05 to $5.30.
“Even though the U.S. economy appears to be growing at a slower pace, our global portfolio and performance reinforces our expectations to attain the higher end of the guidance range,” Chief Financial Officer Richard Peretz said in a statement.
In last year’s second quarter, net income was $454 million, or 49 cents, including the costs of transferring health and welfare obligations for some retirees that were concentrated in the domestic package business.