Source: ATW Daily News Author: 07/23/2008
Subject Concerned: Cargo
UPS reported a 20.9% drop in second-quarter net income to US$873 million from US$1.13 billion last year. Revenue rose 6.7% to US$13 billion but expenses lifted 10.8% to US$11.55 billion, producing an operating profit of US$1.45 billion, down 17.6% from US$1.77 billion in the same period last year.
Total international package revenue, which is tied heavily to air operations, rose 17.9% to US$2.95 billion, but international package operating margin fell 5.2 points year-over-year to 13.8%.
"International results were negatively impacted by higher fuel costs, declining US import volume and slower growth in premium services in the major regions of the world," UPS said.
US domestic next-day air revenue declined 2.1% to US$1.65 billion.
"Although operating conditions in the second quarter were challenging, UPS firmly believes the long-term growth fundamentals for our company and for our industry are very favorable," Chairman and CEO Scott Davis said.
The company predicted that "the second half of 2008 will generate modestly better results than the first half, assuming business conditions do not worsen."