Bruce Barnard, Special Correspondent | Aug 02, 2012 10:43AM EDT
Deutsche Post DHL lifted its 2012 earnings guidance after strong demand for its express delivery services in Asia boosted its second quarter results.
The German mail, logistics and transport giant says it now expects earnings before interest and tax to grow to 2.6-2.7 billion euros ($3.2-3.3 billion) from 2.44 billion euros in 2011 and from a previous forecast of 2.5.-2.6 billion euros.
Deutsche Post’s bullish stance contrasts with a more sober outlook from its U.S. rivals UPS, which cut its 2012 profit forecast last month, and FedEx, which is cutting costs in the face of weakening demand.
“We continue to perform well,” said CEO Frank Appel.” The excellent market positions of our brands and divisions in the world’s growth markets are paying off. We have a strong foundation for generating long-term improvements in revenues and earnings.”
“Things are a bit different than for our competitors because we have a broad network with which we benefit from intra-Asian trade,” said Chief Financial Officer Larry Rosen. “We are still seeing good growth in Asia, with the exception of the tech sector.”
Revenue rose 7.3 percent in the second quarter from a year ago to $16.85 billion, driven mainly by growth at DHL’s express, freight forwarding and supply chain divisions.
Despite rising profitability, operating earnings fell by 3 percent to $667.9 million from $691.3 million in the second quarter of 2011 largely due to the $223 million one-off negative impact of a sales tax payment.
First half revenue grew 5.8 percent to $31.5 billion and operating profit was up 3.6 percent at $1.48 billion.
The DHL express unit boosted second quarter revenue by 10.7 percent to $3.9 billion, driven by strong growth in Asia and the Americas where continuing strong business growth in the U.S. played a key role in the improved performance. Operating profit jumped more than 50 percent to $452 million.
Global freight forwarding revenues increased 5.7 percent to $4.9 billion and operating profit was 19.1 percent higher at $168.5 million.
The supply chain division’s revenue grew 12.5 percent to $4.3 billion but profit dipped to $124 million from $136.5 million from the second quarter in 2011, which included a $28.3 million gain from the sale of a non-core U.S business.
Contact Bruce Barnard at brucebarnard47@hotmail.com.
