A big gain in domestic package business along with tight cost controls drove UPS to its strongest profit in four years in 2010, a $3.49 billion net profit that was 62.1 percent better than the year before, and the parcel carrier issued a stronger outlook for earnings expansion in 2011.
UPS raised its earnings outlook by 16 to 22 percent beyond its earlier projections, a bullish forecast that would push the company’s profit to a new record and could double UPS’s profit total from just two years ago.
“Over the past two years, UPS took the necessary steps to weather the economic storm and emerged stronger,” said Chief Financial Officer Kurt Kuehn.
UPS news from JOC:
UPS Raises Ground, Air Rates 4.9 Percent
The company’s revenue for 2010 grew 9.4 percent to $49.55 billion and the $5.87 billion operating profit was the largest UPS has reported since 2006. That was largely because costs grew only 5.2 percent during the recovery year while yield, or average revenue per piece, expanded 4.2 percent across the global network.
The expansion slowed down somewhat in the fourth quarter, as overall revenue grew 8.4 percent to $13.4 billion and the $1.12 billion operating profit was 47.8 percent better than the same quarter the year before.
But the U.S. domestic business showed strong results, including a 7 percent gain in domestic package revenue and a 22.6 percent boost in revenue at UPS Freight, the company’s less-than-truckload operation.
International package revenue grew 14.8 percent over the full year compared to 2009, to $11.1 billion, and the international package segment profit expanded 39.3 percent to $1.9 billion.