UPS warns of ‘greater uncertainty’; 2Q profit up only 2.2%
Published: July 24, 2012
United Parcel Service 767. Courtesy, UPS
United Parcel Service (UPS) reported second-quarter net income of $ 1.12 billion, up 2.2% over a net profit of $ 1.09 billion in the prior-year period. The company’s revenue growth stagnated as the global economic outlook grew more cloudy.
“Increasing uncertainty in the United States, continuing weakness in Asia exports and the debt crisis in Europe are impacting projections of economic expansion,” UPS chairman and CEO Scott Davis said.
CFO Kurt Kuehn added, “The company’s performance was mixed during the second quarter … As we look toward the second half of the year, customers are more concerned as greater uncertainty exists. Additionally, economic growth expectations have come down.”
The Atlanta-based delivery giant lowered its earnings guidance for 2012, projecting that full-year earnings per share will rise 3%-8% over 2011. Back in February, UPS had been predicting an earnings per share increase of 9%-15% for 2012.
Companywide second-quarter revenue grew 1.2% year-over-year to $ 13.35 billion while expenses heightened 1% to 11.56 billion, producing an operating profit of $ 1.79 billion, up 2.6%. The air-intensive international package segment experienced a 4% decline in revenue compared to the 2011 June quarter to $ 3.01 billion. An international package operating profit of $ 454 million was down 10.1% year-over-year.
The company’s core US domestic package business did boost second-quarter revenue 4.1% to $ 8.06 billion.