Executive Briefings

Despite Break-up With Amazon, UPS Reports Very Strong Fourth Quarter in 2015

If you have been following the news from the express and e-commerce industries lately, you could be forgiven for thinking that the big U.S. integrators are in serious trouble, trembling at the thought of Amazon not only pulling its business from UPS and FedEx, but also competing for their remaining business.

Perhaps that will happen at some point in the future, but as of today, UPS is stronger than ever, reporting fourth-quarter 2015 net income up almost 200 percent y-o-y to $1.33bn, as total revenue rose 1.0 percent to $16.05bn. Reported operating profit for the quarter was up 172 percent to $2.05bn.

These spectacular jumps in net income and operating profit paint a somewhat unrealistic picture of the year-over-year differences, but even after adjusting for one time charges in both 4Q14 and 4Q15, it is safe to say that UPS capped a very strong year with an exceptionally strong quarter, and that it expects to continue that strong performance through the coming year.

As has been the case with most companies in the airfreight and express industry, UPS saw falling fuel prices and a strengthening U.S. dollar take a bite out of its revenue, reflected in declines in per-package revenue, but this clearly had little impact on the bottom line, as all of the company’s operating segments saw solid gains in adjusted operating profit.

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Perhaps that will happen at some point in the future, but as of today, UPS is stronger than ever, reporting fourth-quarter 2015 net income up almost 200 percent y-o-y to $1.33bn, as total revenue rose 1.0 percent to $16.05bn. Reported operating profit for the quarter was up 172 percent to $2.05bn.

These spectacular jumps in net income and operating profit paint a somewhat unrealistic picture of the year-over-year differences, but even after adjusting for one time charges in both 4Q14 and 4Q15, it is safe to say that UPS capped a very strong year with an exceptionally strong quarter, and that it expects to continue that strong performance through the coming year.

As has been the case with most companies in the airfreight and express industry, UPS saw falling fuel prices and a strengthening U.S. dollar take a bite out of its revenue, reflected in declines in per-package revenue, but this clearly had little impact on the bottom line, as all of the company’s operating segments saw solid gains in adjusted operating profit.

Read Full Article