UPS’s second-quarter revenues
In the second quarter, United Parcel Service (UPS) was able to exceed the Thomson Reuters–surveyed analysts’ revenue estimate of $17.3 billion. The company reported revenues of $17.4 billion, which beat analysts’ estimate by 0.70%. UPS’s second-quarter revenues were up 9.6% from $15.9 billion in the second quarter of 2017.
Segment-wise Q2 revenues
United Parcel Service operates in three reportable segments—US Domestic Package, International Package, and Supply Chain and Freight. Its US Domestic Package division accounts for ~60.0% of total revenues, whereas the remaining two verticals contribute ~20.0% each.
The US Domestic Package segment’s revenues grew 6.3% to $10.3 billion from $9.7 billion in the second quarter of 2017, driven by e-commerce demand and higher base pricing. In the division, revenue growth was witnessed across all product lines in the quarter. The Domestic vertical’s revenue per piece rose 3.6% YoY due to increased base rates and higher fuel surcharges.
The International Package segment’s revenues jumped 13.6% to $3.6 billion in the second quarter from $3.1 billion in the second quarter of 2017. The segment’s revenue gains were fueled by ~10.0% growth in its Daily Export business’s shipments. Solid volume growth in the United States and Europe drove these shipments higher.
The Supply Chain and Freight segment witnessed solid 16.1% YoY revenue growth in the second quarter, touching $3.5 billion from $3.0 billion in the second quarter of 2017. The Forwarding business included within the Supply Chain segment posted robust 23.0% revenue growth in the second quarter.
Peers’ Q2 YoY revenue growth
An asset-light integrated transportation solutions provider, Landstar System (LSTR) saw a 36.0% YoY rise in its second-quarter revenues. The company reported 25.0% YoY growth in its revenue per van and a 19.0% rise in revenue per platform equipment load. Ryder System (R) recorded 17.0% YoY revenue growth riding on new business gains and higher shipments.
United Parcel Service (UPS) expects its B2C (business-to-consumer) volumes to outpace its B2B (business-to-business) volumes for the rest of 2018. The logistics giant expects positive trends in manufacturing, technology, and automotive sectors in 2018. With higher fuel costs, the company expects increased fuel surcharge revenues in the second half of 2018.
For the fourth quarter, UPS hopes to have a good peak season. Two fewer operating days in December is expected to negatively impact its volumes in the fourth quarter.
In the next article, we’ll look at the US Domestic segment’s second-quarter results.