The UPS acquisition of TNT Express is on track and so is profitability at the Dutch parcel delivery company, but “mixed” European economic conditions and waning Asia-Europe business cloud the horizon.
TNT Express swung to a $48.7 million profit in the first quarter compared to a $103.9 million loss in the same period. Revenue rose 1.3 percent year-over-year to nearly $2.4 billion, as single-digit growth in the Asia-Pacific and America offset a slip in revenue from Europe and the Middle East.
“In Europe, cost savings and commercial initiatives are being pursued to mitigate revenue pressure. Profitability in Asia-Pacific improved, despite weak intercontinental demand. Americas also improved, with better results in Brazil,” said CEO Marie-Christine Lombard.
Revenue from European and Middle East operations slipped 1.1 percent year-over-year to roughly $1.5 billion in the first quarter, while Asia-Pacific business dropped 4.8 percent to $524 million in the same period.
Americas revenue rose 4.5 percent year-over-year to $153.9 million, and revenue from other networks jumped 10.6 percent to $164.4 million from the same period a year ago.
Daily volume from European and Middle Eastern operations in the first quarter rose 2 percent year-over-year, but pricing per package slipped 2.9 percent. Daily Asia-Pacific traffic in the first quarter fell 8.7 percent from the same period a year ago, while revenue per package rose 4 percent.
Brazilian revenue growth helped drive a 7.8 percent rise in average revenue per package in the Americas. That pricing increasing helped offset a slip in daily package volume of 2 percent.
TNT expects falling Asia-pacific volume to continue throughout the year, and the carrier has removed intercontinental capacity and is considering further reductions. UPS is expected to complete its $6.8 billion acquisition of TNT in the third quarter.