Summary
United Parcel Service (UPS) reported its third-quarter 2013 financial results, showing a significant increase in net income compared to the prior year, largely driven by the absence of a substantial multiemployer pension plan withdrawal charge recorded in Q3 2012. Revenue saw a modest increase, primarily from volume growth in its U.S. Domestic Package segment, while International Package and Supply Chain & Freight segments experienced revenue declines or flat performance. Despite topline growth, the company faced challenges including slower economic expansion impacting business-to-business shipments and trade lane overcapacity in international markets. UPS continued to focus on yield management and operational efficiencies. The company also highlighted its ongoing share repurchase program and a new $10 billion authorization, signaling a commitment to returning capital to shareholders.
Financial Highlights
52 data points| Revenue | $13.52B |
| Operating Expenses | $11.72B |
| Operating Income | $1.80B |
| Interest Expense | $92.00M |
| Net Income | $1.10B |
| EPS (Basic) | $1.17 |
| EPS (Diluted) | $1.16 |
| Shares Outstanding (Basic) | 935.00M |
| Shares Outstanding (Diluted) | 944.00M |
Key Highlights
- 1Net income for the quarter significantly increased to $1,097 million from $469 million in the prior year's quarter, primarily due to the absence of a $896 million pre-tax charge related to a multiemployer pension plan withdrawal in Q3 2012.
- 2Consolidated revenue grew by 3.4% to $13,521 million, driven by a 5.0% increase in U.S. Domestic Package revenue, which benefited from e-commerce growth, partially offset by declines in International Package and Supply Chain & Freight revenue.
- 3Operating profit saw a substantial increase of 135.5% to $1,804 million, a result that is heavily influenced by the year-over-year comparison excluding the prior year's pension charge.
- 4U.S. Domestic Package segment experienced a 2.3% increase in average daily package volume, with strong growth in Ground shipments, while Next Day Air volume saw a slight decline.
- 5International Package segment revenue grew by 2.5%, but faced challenges such as a shift from premium express products to standard delivery and currency impacts, leading to a decrease in average revenue per piece.
- 6The company repurchased approximately $2.87 billion of its stock in the first nine months of 2013 under a new $10 billion authorization, underscoring a focus on capital return to shareholders.
- 7UPS paid a $268 million termination fee in Q1 2013 related to the abandoned acquisition of TNT Express, impacting the International Package segment, though this was partially offset by a foreign currency gain from the liquidation of a related foreign subsidiary.