UPS nearly doubles 2Q net income

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Ups Freight

United Parcel Service Inc. on Thursday, July 22, posted second-quarter net income of $845 million compared with $445 million during the same period in 2009. Net income in the second quarter of 2009 included an after-tax charge of $48 million related to a recalculation of foreign currency obligations. Revenue increased to $12.2 billion from $10.8 billion.

For the first six months of 2010, UPS had net income of $1.4 billion compared with $846 million during the same period in 2009. Revenue increased to $23.9 billion from $21.8 billion.

“UPS fired on all cylinders in the second quarter even in the face of a mixed global economic environment,” said Scott Davis, chairman and chief executive officer of the Atlanta-based company. “Thanks to superb execution, our U.S. domestic reorganization is producing better than expected results. Substantial growth in our international segment continues to outpace the market. It’s clear the strategic direction we’ve set for the company is proving successful.”

Each business unit in the company’s Supply Chain and Freight segment improved profitability. Forwarding led the way with tonnage growth exceeding 30 percent, but margin expansion was limited due to capacity constraints in the global air freight market. UPS Freight revenue grew 10 percent over last year, driven by improved yield and higher weight per shipment. UPS Freight returned to profitability in the second quarter.

“UPS’s performance in the second quarter was driven by our ability to respond to customers’ needs through our broad product portfolio and integrated global network,” said Kurt Kuehn, chief financial officer. “We experienced strong revenue growth across the board, with substantial margin expansion in our U.S. and International segments. Despite the anticipated slow pace of the U.S. recovery and a cautious outlook for Europe, we are confident in our ability to grow the business and improve profits.”