Bruce Barnard, Special Correspondent | Nov 09, 2011 7:23AM EST
Deutsche Post DHL raised its full year earnings forecast Wednesday after reporting an 18.5 percent surge in third quarter operating profit to $885 million driven by strong growth in domestic mail and international express package delivery businesses.
Net profit at the German mail and express group jumped 70 percent to $528 million in the three months ending Sept. 30 as revenue grew 2.5 percent to $17.95 billion.
The Bonn-based group is now forecasting full-year profit will exceed $3.3 billion after earlier projections of a profit in the range of $3 billion to $3.3billion.
Deutsche Post highlighted its mail unit, which is benefiting from the strong growth in internet retailing, and DHL’s “excellent” positioning in developing markets, particularly Asia, which drove another “powerful” performance in logistics.
“We are located in all of the regions and markets that continue to generate particularly strong growth: in the emerging markets of Asia, the Middle East and Latin America as well as in the dynamic German parcel market,” said CEO Frank Appel.
Express revenue grew 7.7 percent in the quarter to $3.4 billion, driven by double-digit volume growth in international shipments, while operating profit was up 10 percent to $300 million.
The global forwarding and freight division lifted revenue by 1.9 percent to $5.2 billion with ocean and air revenues coming under pressure while overland transport continued to post strong growth. Earnings grew 22 percent to $167 million.
Supply chain revenues were flat at $4.5 billion but rose 6.2 percent after adjusting for currency and consolidation effects, including the sale of a non-core business in the U.S. Profit grew almost 20 percent to $135.6 million on “significant” growth in the Asia/Pacific region as well as in the life sciences and healthcare and automotive sectors.
“We are not ignoring the possibility that the economic environment could get tougher, especially in developed countries,” Appel said.
“But our early-warning systems have not given us any indication that our business faces a worrisome slowdown.”
--Contact Bruce Barnard at brucebarnard47@hotmail.com.