UPS’ supply chain and freight segment posts double digit profit growth in Q1
April 27, 2018: Logistics and express services provider United Parcel Service (UPS) reported 10 percent increase in revenue in the first quarter of the year amounting to $17.1 billion, driven by its supply chain and freight, and international package segments.
The company’s revenues and net profits saw an upturn in the reporting period. However, its operating profits declined partly due to harsh winter weather.
The company also reflected figures of its US domestic segment business. The revenue for the business increased by 7.2 percent to $10.2 billion due to strong demand, while operating profits took a $194 million hit to decline to $756 million as a result of headwinds from severe winter weather of $85 million, Saturday deployment, network projects and higher pension expenses.
The revenue from the international segment increased 15 percent despite two fewer operating days in many countries.
“The execution of our diversified global strategies and our investments produced double-digit growth in revenue and profit,” said David Abney, chairman and chief executive, UPS. “Each of our International regions is contributing to our financial gains, and we expect this strong momentum to continue.”
The supply chain and freight segment produced another quarter of strong financial results. Revenue and operating profit grew by double digits due to successful revenue-quality initiatives, opportunistic growth strategies and structural cost reductions.
The supply chain and freight segment’s revenue amounted to $3.4 billion, up 16 percent over the first quarter of 2017. While, the operating profit was $170 million, up 14 percent from the same quarter in 2017.
“The Forwarding business led all units with 27 percent revenue growth, as revenue management initiatives and stable market conditions drove top-line gains,” said the company.