The Joplin Globe, Joplin, MO

Business

April 26, 2012

UPS 1Q profit up, but international business slows

ATLANTA — UPS said Thursday that its first-quarter profit rose 6 percent, but the results came in below Wall Street’s expectations as Asian exports and other overseas shipments slowed.

United Parcel Service Inc., the world’s largest package company, said net income rose to $970 million, or $1 per share, from $915 million, or 91 cents per share.

Revenue rose 4.4 percent to $13.14 billion.

Analysts’ expected net income of $1.02 per share and revenue of $13.3 billion, according to FactSet.

Much of UPS’ profit came from domestic shipping, where revenue was up 6.1 percent on higher volume and prices. But that was offset by a shift toward lighter and slower shipping methods.

UPS, which is based in Atlanta, said online sales drove some of its speedy shipping options, including next day air. Ground volume rose 4 percent on demand for lightweight, less expensive shipments.

International revenue was up just 2.3 percent to $2.97 billion, but revenue per package fell. Asian exports have slowed as China’s economy cools, and some European countries slide into recession. The international business, which had been racking up double-digit quarterly sales gains, has been slowing since last summer.

UPS said part of the reason that shipments from Asia to the U.S. are down is that some businesses are locating factories in Mexico or other countries closer to home, to keep a tighter handle on inventory.

UPS and its smaller rival FedEx Corp. tend to be indicators of broader economic health because they move millions of packages for businesses and consumers every day.

In morning trading, UPS shares fell $2.30, or 2.9 percent, to $77.35.

 

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