UPS has announced a significant recovery in its financial performance for the third quarter of the year, with revenues, operating profits, and net income all showing marked improvements. The company reported a 5.6% year-on-year increase in revenues, totaling $22.2 billion. Operating profits soared by 47.8% to $2 billion, while net income rose by 36.6%, reaching $1.5 billion.
These results included a net after-tax benefit of $36 million, which was driven by a $152 million gain from the sale of Coyote Logistics, offset by $116 million in costs related to the company’s transformation strategy.
Divisional performance also reflected positive trends. The US domestic package sector saw revenues rise by 5.8% to $14.4 billion, with operating profits climbing 57.3% to $898 million. This growth was largely fueled by a 6.5% increase in average daily volume, although it was partially tempered by a 2.2% decline in revenue per package.
On the international front, revenues increased by 3.4% year-on-year to $4.4 billion, while operating profits dipped slightly by 0.7% to $3.6 billion. This segment’s revenue growth was primarily attributed to a 2.5% rise in revenue per package.
The supply chain business demonstrated robust growth as well, with an 8% increase in revenues and a staggering 103.5% rise in operating profits, which reached $289 million. This surge was driven by a 15.1% improvement in air and ocean revenues, largely due to increased market demand from Asia, as well as the acquisition of MNX and a new contract with the US Postal Service for air cargo services. However, these gains were somewhat offset by weaker performance at Coyote following the completion of its sale in mid-September.
UPS CEO Carol Tomé commented on the results, stating, “After a challenging 18-month period, our company returned to revenue and profit growth. Peak season is nearly upon us, and we are ready to deliver another successful holiday season and continue the progress we demonstrated in the third quarter.”
This positive performance marks a turnaround from the second quarter, during which UPS reported declines in both profits and revenues. “On our last earnings call, we said that the second quarter would not only be the bottom but a turning point for our performance, and that we would return to revenue and profit growth in the third quarter, which we did,” Tomé added.
In addition to these financial gains, UPS is also pursuing its goal of becoming a leader in healthcare logistics with the acquisition of Germany-based Frigo-Trans and its sister company, BPL, aimed at enhancing its cold chain network across Europe.
