Summary
United Parcel Service (UPS) reported a significant decline in revenue and net income for the second quarter and the first six months of 2009 compared to the same periods in 2008, primarily driven by the global economic recession. Consolidated revenue decreased by 16.7% in the second quarter and 15.2% year-to-date. Net income saw a substantial drop of 49.0% for the quarter and 52.4% year-to-date. This downturn was observed across all segments: U.S. Domestic Package, International Package, and Supply Chain & Freight. The company attributed these results to reduced package volumes, lower revenue per piece due to decreased fuel surcharges and shifts in product mix, and broader economic weakness impacting demand. Despite the challenging economic climate, UPS managed its expenses effectively. Operating expenses decreased year-over-year, aided by lower compensation and benefits, reduced fuel costs, and cost containment measures. The company also demonstrated strong liquidity, with net cash from operating activities remaining substantial, although lower than the previous year. Capital expenditures were reduced, reflecting a more cautious investment approach. UPS continued its share repurchase program, albeit at a slower pace, and maintained its quarterly dividend payment, signaling confidence in its long-term financial stability and commitment to returning value to shareholders.
Financial Highlights
48 data points| Revenue | $10.83B |
| Operating Expenses | $9.93B |
| Operating Income | $895.00M |
| Interest Expense | $181.00M |
| Net Income | $445.00M |
| EPS (Basic) | $0.45 |
| EPS (Diluted) | $0.44 |
| Shares Outstanding (Basic) | 998.00M |
| Shares Outstanding (Diluted) | 1.00B |
Key Highlights
- 1Consolidated revenue for the second quarter of 2009 decreased by 16.7% to $10.8 billion, and year-to-date revenue fell by 15.2% to $21.8 billion, reflecting the impact of the global economic recession.
- 2Net income for the second quarter declined by 49.0% to $445 million, and year-to-date net income dropped by 52.4% to $846 million, primarily due to lower revenues and operating profit.
- 3U.S. Domestic Package revenue decreased by 12.0% in Q2 and 11.1% year-to-date, impacted by a 4.6% decrease in package volume and a 7.8% decrease in revenue per piece.
- 4International Package revenue saw a significant decline of 23.8% in Q2 and 21.4% year-to-date, driven by a 5.5% drop in volume and a 17.6% decrease in revenue per piece.
- 5Operating expenses were reduced by 14.0% in Q2 and 11.3% year-to-date, benefiting from lower compensation and benefits, fuel costs, and effective cost containment measures.
- 6Net cash from operating activities was $3.155 billion for the first six months of 2009, a decrease from $5.028 billion in the prior year, impacted by lower net income and the absence of significant tax benefits received in 2008.
- 7Capital expenditures were reduced to $671 million in the first six months of 2009 from $1.387 billion in the same period of 2008, reflecting a strategic reduction in investment.