Atlanta-based United Parcel Service Inc. announced its second-quarter financial results July 24, noting that the international small package segment showed promising gains during the three-month period ending June 30, while domestic small package profits fell 3.4 percent compared to the same period last year.
Overall the company reported a 4.1 percent increase in net income to $1.1 billion from last year’s second quarter, with the gains coming form the supply chair and freight segment and an international package segment that posted an increase in operating profit of 14.7 percent to $475 million. The total revenue from the international package segment was $2.5 billion.
Both UPS Chairman and CEO Mike Eskew and Vice Chairman and CFO Scott Davis praised the performance of the international package segment in a statement released with the results.
“We see increasing benefits for the company due to investments in both ground, air and ocean freight capabilities as well as further expansion globally of our small package business,” Mr. Davis said.
But he also said that he expects the U.S. package business to show “gradual volume growth.”
The operating profit for the U.S. domestic package segment dipped 3.4 percent to $1.19 billion in the second quarter. The total revenue for domestic packages, however, was $7.57 billion, greatly exceeding the revenue from the international package segment of $2.5 billion.
Before announcing the second quarter results, Mr. Eskew spoke of UPS’ commitment to international markets at the U.S. Commerce Department’s inaugural Americas Competitiveness Forum in Atlanta June 12.
He said that while Asia could not be ignored, companies in the Americas should take advantage of free trade agreements like Nafta in the Western Hemisphere where much more U.S. trade takes place.
He also said during the forum that Nafta, which includes the United States, Canada and Mexico, is the second biggest trading bloc in the world’s largest economy, only behind the European Union, and accounts for far more trade than the U.S. conducts with China.
Nafta countries receive 19 percent more U.S. exports than China, and the U.S. imports 13 percent more goods from Nafta countries than China, according to Mr. Eskew.
Despite Mr. Eskew’s commitment to making intra-American trade flow more freely, the UPS figures showed that much of the company’s international growth occurred in Asia.
The companies total export volume increased by 10.4 percent, and exports to Asia jumped more than 25 percent with “particularly strong growth out of China,” according to the statement issued with the results.
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