Dubai, UAE, July 27, 2019 – UPS (NYSE:UPS) today announced second-quarter 2019 adjusted earnings per share of $1.96.  The company turned the rising demand for next-day service into strong financial results in the U.S. and leveraged asset-light and proven cost management strategies in the International and Supply Chain and Freight segments. 

 

“Our Transformation initiatives are generating greater efficiencies across the network and, when combined with our growth strategies, UPS achieved profit growth in all segments,” said David Abney, UPS chairman and CEO. “We also announced a very extensive roll-out of new products and services such as UPS My Choice for Business, expanded UPS Access Points, and UPS Worldwide Economy, among others, for small- and medium-sized businesses, all designed to generate additional profitable growth.” 

 

Amounts presented on an adjusted basis exclude Transformation strategy costs. Second-quarter 2019 adjusted results exclude a pre-tax charge of $21 million, or $0.02 per share after tax.  Second-quarter 2018 adjusted results excluded a pre-tax charge of $263 million, or $0.23 per share after tax, primarily from the UPS Voluntary Retirement Program. 

 

Consolidated Results		Adjusted		Adjusted
	2Q 2019	2Q 2019	2Q 2018	2Q 2018
Revenue	$18,048 M		$17,456 M
Net Income	$1,685 M	$1,702 M	$1,485 M	$1,685M
Diluted Earnings Per Share	$1.94	$1.96	$1.71	$1.94

 

For the total company in 2Q 2019:

 

The U.S. Domestic segment generated significant volume growth in all products, led by a more than 30% surge in UPS Next Day Air volume. The sharp increase in demand for the company’s next-day services was driven by accelerated delivery requirements from e-commerce shippers. 

 

“Demand for faster delivery is a structural change in our industry,” said Abney. “Anticipating this change, our additional air capacity and modernized network enabled this growth to have a positive impact on profitability and positions UPS well to serve the growing needs of the market.”

 

Both B2B and B2C shipments grew within the period.  In addition, the company added more than 2 million square feet of new, automated sorting capabilities, increasing efficiency benefits and contributing to positive operating leverage. 

 

		Adjusted		Adjusted
	2Q 2019	2Q 2019	2Q 2018	2Q 2018
Revenue	$11,150 M		$10,354 M
Operating profit	$1,208 M	$1,226 M	$939 M	$1,135 M

 

International benefitted from its highly flexible network and by targeting growth markets within the company’s diverse revenue base. The segment generated its best second-quarter profit in history and expanded adjusted operating margins while navigating areas of trade uncertainty.

 

		Adjusted		Adjusted
	2Q 2019	2Q 2019	2Q 2018	2Q 2018
Revenue	$3,505 M		$3,602 M
Operating profit	$663 M	$665 M	$618 M	$654M

 

Supply Chain and Freight grew operating profit to more than $270 million, a double-digit increase for the quarter. Successful cost management enabled by the company’s asset-light strategies delivered strong financial results while revenue was pressured by softer trade. 

 

		Adjusted		Adjusted
	2Q 2019	2Q 2019	2Q 2018	2Q 2018
Revenue	$3,393M		$3,500 M
Operating profit	$272 M	$273 M	$216 M	$247M

 

The company provides guidance on an adjusted (non-GAAP) basis because it is not possible to predict or provide a reconciliation reflecting the impact of future pension mark-to-market adjustments or other unanticipated events, which would be included in reported (GAAP) results and could be material.

 

“UPS grew profits across all business segments,” said Richard Peretz, UPS’s chief financial officer. “Our performance was driven by the efficiencies created by investments in our network, the success of ongoing initiatives and our ability to execute in an ever-changing environment. We expect to carry this momentum through the upcoming quarters.”