UPS reports EPS in-line, revs in-line; reaffirms FY16 EPS guidance
- Reports Q2 (Jun) earnings of $1.43 per share, in-line with the Capital IQ Consensus of $1.43; revenues rose 3.8% year/year to $14.63 bln vs the $14.65 bln Capital IQ Consensus.
- U.S. Domestic operating profit increased to $1.2 billion and operating margin expanded 10 basis points to 13.7%. Productivity improvements bolstered by technology, combined with lower fuel costs, resulted in a 0.2% reduction in cost per unit compared to the same quarter in 2015.
- International operating profit jumped more than 11% to $613 million, setting a record second-quarter level. Volume growth in all products, disciplined pricing and network efficiency gains contributed to the increase in profitability.
- Supply Chain and Freight revenue increased by more than 13%, to $2.5 billion. This was mainly due to the acquisition of Coyote Logistics in the third quarter of last year. Weak market conditions in the Air Freight Forwarding and LTL markets weighed on top-line growth.
- Co reaffirms guidance for FY16, sees EPS of $5.70-5.90 vs. $5.80 Capital IQ Consensus Estimate.