UPS today reported its operating profit in the second quarter of 2013 was $1.74 billion, sliding from $1.79 billion in the second quarter of 2012.
Quarterly revenue was $13.51 billion, increasing 1.2 percent from $13.35 billion in the same quarter in the previous year. U.S. domestic package revenue in the second quarter totaled $8.24 billion, up 2.3 percent year-over-year from $8.06 billion, while international package revenue was $3.06 billion, up 1.6 percent from $3.01 billion. Quarterly revenue from UPS’s supply chain and freight business was $2.20 billion, down 3.2 percent compared with the second quarter of last year. Last week, UPS had lowered its guidance for its second quarter and full year performance.
In terms of volume, domestic daily packages in the second quarter improved 1.9 percent compared with the same period last year, and international daily packages improved 5.0 percent. Daily export shipments increased 5.0 percent, with Europe and Asia leading, and non-U.S. domestic volume was up 5.1 percent compared with the prior-year period.
Freight forwarding results remained under pressure as tonnage declined and yields were negatively impacted by lower demand in trans-Pacific trade lanes, according to UPS.
“Market conditions and shipper preferences clearly impacted our freight forwarding and international business,” explained Scott Davis, UPS’s chairman and CEO, in a written statement. “UPS is adapting to these conditions to ensure we deliver a solid second half.”
“UPS second quarter results were below our expectations as a result of disappointing performance in freight forwarding and a slight miss in International package,” added Kurt Kuehn, the company’s CFO. “Going forward, UPS is focused both on our long-term strategy and adapting to changing market conditions.”