» Subscribe Today!
More of what you want to know.
The Daily News
X

Forgot your password?
Skip Navigation LinksHome >
VOL. 128 | NO. 143 | Wednesday, July 24, 2013

UPS Profit Falls on Shift to Lower Cost Services

DAVID KOENIG | AP Business Writer

Print | Front Page | Email this story | Comments ()

DALLAS (AP) – UPS said Tuesday that second-quarter profit fell 4 percent as customers shifted from premium toward lower-priced shipped services.

The company called the results disappointing and said it was adapting to the changing market.

Atlanta-based United Parcel Service Co. and rival FedEx Corp. are losing some high-priced business as international shippers switch from premium next-day air deliveries to two-day or three-day services. UPS Chairman and CEO Scott Davis told analysts on a conference call that the shift could be temporary due to a lack of new technology products from Asia.

"On the other hand, some of the trade-down is likely permanent," Davis added, because of improved manufacturing supply chains and more global trade among nearby nations.

For pallet-size international shipments, cargo carriers such as UPS are facing more competition from passenger airlines, which are loading more freight in the bellies of their new, wide-body jets. Since the airlines are operating the flights anyway, they often charge lower freight rates to fill up the cargo holds.

UPS said that it earned $1.07 billion, or $1.13 per share, down from $1.12 billion, or $1.15 per share, a year earlier.

The delivery company tipped off investors about the headline number two weeks ago, so analysts were expecting the lower earnings per share.

Revenue rose 1.2 percent to $13.51 billion but was lower than expected. Analysts had forecast $13.59 billion, according to a FactSet survey. Costs rose 2 percent.

The company predicted that earnings per share will grow by between 4 percent and 13 percent during the second half of this year compared with the same period in 2012. UPS still expects a full year adjusted profit of $4.65 to $4.85 per share, which would be an increase from $4.53 per share last year.

UPS, with a fleet of jets and an armada of brown trucks, delivered 15.7 million packages a day during the quarter, up 2.3 percent.

Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Sign-Up For Our Free Email Edition
Get the news first with our daily email


 
Blog Get more from The Daily News
Blog News, Training & Events
RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 110 154 13,810
MORTGAGES 135 193 18,019
FORECLOSURE NOTICES 15 39 3,544
BUILDING PERMITS 430 430 32,733
BANKRUPTCIES 52 130 13,133
BUSINESS LICENSES 20 45 4,750
UTILITY CONNECTIONS 83 204 20,104
MARRIAGE LICENSES 0 33 4,230

Weekly Edition

Issues | About

The Memphis News: Business, politics, and the public interest.