UPS posts revenues rise but net income declines in Q4

posted on 1st February 2019 by Justin Burns
UPS posts revenues rise but net income declines in Q4

UPS has reported that revenues rose in the fourth quarter (Q4) of 2018 but net income fell in a competitive operating environment for the US postal packaging firm.

Revenue in Q4 was $19,848 million, up on the $18,975 million in Q4 2017. Net income was $453 million, compared with $1.24 billion, for the same period a year ago.

UPS said Q4 earnings were highlighted by high-quality revenue initiatives that are producing “positive, sustainable benefits” which included pricing and mix strategies that lifted revenues.

US Domestic segment revenue was up 6.3 per cent in Q4 due to yield growth, while the International division achieved record profits and margin rises above 20 per cent.

UPS said the Supply Chain and Freight business remains strong. Q4 segment profitability was reduced by about $60 million as a result of the UPS Freight contract ratification process. Profitability for the other business units was positive, led by gains in Forwarding.

Revenue for the segment in Q4 was $3,444 million, up from $3,421 million in Q4 2017 and operating profit was $224 million in Q4 2018, down from $241 million in Q4 2017.

UPS said the business units demonstrated continued growth as the result of greater alignment with small and medium-sized customers. Coyote, brokerage and international air and ocean freight made significant contributions to operating profit within Forwarding.

Logistics revenue increased almost seven per cent from growth in the healthcare, aerospace, retail and manufacturing sectors.

UPS chairman and chief executive officer, David Abney said: “We achieved our 2018 adjusted earnings-per-share goal by successfully executing Transformation investments and initiatives that lifted revenue quality and improved efficiency.

“Our diverse portfolio, global footprint and flexible network position UPS for profitable growth in 2019 and beyond.”

For the full-year, UPS’ total revenue increased 7.9 per cent to $71.9 billion on shipment growth; revenue-yield expansion of 4.3 per cent surpassed 2017 yield by 200 basis points.