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UPS delivers strong 2Q
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July 22, 1999: 12:25 p.m. ET
World's biggest shipper posts 28% gain as international operating profit triples
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NEW YORK (CNNfn) - United Parcel Service Inc., the world's biggest parcel-delivery company, Thursday delivered a 28 percent increase in second-quarter profits as demand for domestic shipments surged and international operating profits almost tripled.
Income for the quarter ended June 30 rose to $588 million, or $1.04 per diluted share, compared to $458 million, or 83 cents, in the same period a year ago. Revenues for the quarter rose 7.4 percent to $6.56 billion.
The results came less than a day after the shipping giant stunned Wall Street with its announcement that it plans to sell a 10 percent stake in the privately held company in one of the largest public offerings ever. Analysts estimate UPS could raise $3 billion to $5 billion in an IPO.
An increase in revenue from domestic package deliveries combined with robust profits at its international operations to help the company post higher profits in the latest quarter.
Domestic package revenue rose 7 percent to $5.43 billion in the second quarter while domestic operating profit jumped almost 18 percent to $878 million.
Much of the gains came from a surge in e-commerce activity -- a field analysts see loaded with potential profits for a company like UPS. In its quarterly statement UPS noted that many e-commerce companies already have built the UPS shipping function into their sites in anticipation of the Christmas online shopping season.
International package revenues, meanwhile, rose almost 8 percent to $861 million, while international operating profits surged to $65 million compared to $23 million a year earlier. UPS attributed its strong international performance to a 29 percent increase in express volume to the Asia-Pacific region.
For the first six months, income rose 34 percent to $1.09 billion, or $1.92 a share, from $810 million, or $1.47 a share, in the first half of 1998.
UPS on Wednesday filed with the Securities and Exchange Commission to sell a 10 stake of the privately held company to the public, a move that required Atlanta-based UPS to unveil its financial statements and balance sheets during the past five years.
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UPS
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