10-QPeriod: Q3 FY2011

UNITED PARCEL SERVICE INC Quarterly Report for Q3 Ended Sep 30, 2011

Filed November 4, 2011For Securities:UPS

Summary

United Parcel Service (UPS) reported solid financial results for the nine months ended September 30, 2011, with total revenue increasing by 7.8% to $38.9 billion and net income rising 26.2% to $2.99 billion compared to the same period in 2010. This growth was primarily driven by strong performance in its International Package and Supply Chain & Freight segments, despite a slight slowdown in U.S. domestic package volume due to economic conditions. The company demonstrated effective cost management and operational efficiencies, contributing to a 16.8% increase in consolidated operating profit for the year-to-date period. UPS continued to invest in its international network, including significant expansion of its Cologne hub in Germany and its intra-Asia air hub in Shenzhen, China, to support global growth initiatives. Shareholder returns remained a focus, with substantial share repurchases and dividend payments executed during the period.

Financial Highlights

51 data points
Beta

Revenue

$13.17B

Net Income

$1.07B

8.1% Net Margin

EPS (Diluted)

$1.09

Total Assets

$35.24B

Cash & Equivalents

$4.13B

Free Cash Flow

$1.44B

Financial Statements
Beta
Revenue$13.17B
Operating Expenses$11.50B
Operating Income$1.67B
Interest Expense$84.00M
Net Income$1.07B
EPS (Basic)$1.10
EPS (Diluted)$1.09
Shares Outstanding (Basic)977.00M
Shares Outstanding (Diluted)987.00M

Key Highlights

  • 1Total revenue increased 7.8% to $38.9 billion for the first nine months of 2011, compared to the same period in 2010.
  • 2Net income saw a significant rise of 26.2% to $2.99 billion for the first nine months of 2011.
  • 3Consolidated operating profit grew by 16.8% to $4.74 billion for the first nine months of 2011.
  • 4The International Package segment showed strong revenue growth (12.5%), driven by increased trade and industrial production globally.
  • 5Investment in strategic infrastructure continued, with major expansions planned for the Cologne hub in Germany and continued optimization of the Asia network.
  • 6The company returned significant capital to shareholders through $2.19 billion in share repurchases and $1.5 billion in dividends during the first nine months of 2011.
  • 7Despite overall growth, U.S. Domestic Package volume was flat due to a slower U.S. economic recovery.

Frequently Asked Questions

For the nine months ended September 30, 2011, UPS reported total revenue of $38.9 billion, an increase of 7.8% compared to the prior year. Net income rose significantly by 26.2% to $2.99 billion.

The International Package segment experienced robust revenue growth of 12.5%, fueled by global trade and industrial production. The Supply Chain & Freight segment also saw revenue growth of 6.6%. The U.S. Domestic Package segment reported revenue growth of 6.4%, though average daily package volume remained flat due to economic conditions.

UPS is focused on yield management, increasing operational efficiency, and cost containment initiatives across its segments. This includes network optimization, leveraging new hubs like the one in Shenzhen, China, and streamlining management structures. Investments in expanding infrastructure, such as the Cologne hub, are also aimed at improving long-term efficiency and capacity.

During the first nine months of 2011, UPS repurchased approximately $2.19 billion of its common stock and paid $1.5 billion in dividends. The company has a remaining share repurchase authorization of $3.004 billion as of September 30, 2011.