United Parcel Service, Inc. (UPS, Financial) filed Quarterly Report for the period ended 2009-03-31.
United Parcel Service Inc. is the world's largest express carrier the world's largest package delivery company and a leading global provider of specialized transportation and logistics services. Their primary business is the time-definite delivery of packages and documents throughout the United States and in over 200 other countries and territories. They have established a vast and reliable global transportation infrastructuredeveloped a comprehensive competitive and guaranteed portfolio of servicesand consistently supported these services with advanced technology. United Parcel Service, Inc. has a market cap of $55.58 billion; its shares were traded at around $55.83 with a P/E ratio of 17.6 and P/S ratio of 1. The dividend yield of United Parcel Service, Inc. stocks is 3.2%. United Parcel Service, Inc. had an annual average earning growth of 17.2% over the past 5 years.
Next Day Air volume, deferred air volume and ground volume declined 0.7%, 1.0%, and 5.0%, respectively during the quarter, primarily as a result of weakness in the U.S. economy. Continued declines in industrial production and retail sales have reduced overall demand in the U.S. small package market, resulting in decreased package volume in our domestic package operations. The decline in air volume was partially mitigated by market share gains, as a result of the recent departure of a competitor in the U.S. market.
The decrease in overall revenue per piece of 4.6% resulted primarily from lower fuel surcharge rates, lower package weights, and unfavorable shifts in product mix. Next Day Air and Deferred revenue per piece decreased 13.8% and 11.7%, respectively, and were negatively affected by an approximate fifteen percentage point decline in the fuel surcharge rate for air products (discussed further below). Additionally, the revenue per piece decline for our air products was also impacted by lower average package weights and a mix shift toward lower yielding products, reflecting the economic recession in the United States. Ground revenue per piece decreased 1.5%, primarily due to a lower fuel surcharge rate. The factors decreasing revenue per piece for our ground and air products were partially offset by an increase in base rates that took effect during the quarter.
We also modified the fuel surcharge on domestic air services by reducing the index used to determine the fuel surcharge by 2%. This fuel surcharge continues to be based on the U.S. Energy Departments Gulf Coast spot price for a gallon of kerosene-type jet fuel. Based on published rates, the average fuel surcharge on domestic air products was 3.69% in the first quarter of 2009, a decrease from the 18.84% in the first quarter of 2008, due to the significant decrease in jet fuel prices, in addition to the 2% reduction in the index. The ground fuel surcharge rate continues to fluctuate based on the U.S. Energy Departments On-Highway Diesel Fuel Price. Based on published rates, the average fuel surcharge on domestic ground products decreased to 3.58% in the first quarter of 2009 from 6.17% in the first quarter of 2008, due to significantly lower diesel fuel prices. Total domestic fuel surcharge revenue, net of the impact of hedging, decreased by $263 million in the first quarter of 2009 compared with the same period of 2008, primarily due to the lower fuel surcharge rates discussed above, as well as the decline in volume for our air and ground products.
International Package revenue declined $519 million, or 18.8%, for the quarter, primarily as a result of a 1.0% decline in package volume and a 15.3% decrease in total revenue per piece.
decreased 13.7% for the quarter, largely due to the adverse impact of currency exchange rates, lower fuel surcharge rates, and the relatively higher growth in lower revenue per piece transborder products, but was partially offset by base rate increases that took effect in the first quarter of 2009. Domestic revenue per piece decreased 18.9% for the quarter, and was primarily caused by adverse currency exchange rate fluctuations (currency-adjusted domestic revenue per piece only declined 1.8%), as well as the impact of lower fuel surcharge rates. Total average revenue per piece decreased 9.3% on a currency-adjusted basis, and the overall change in segment revenue was negatively affected by $172 million due to currency fluctuations, net of hedging activity.
Read the The complete ReportUPS is in the portfolios of Tom Gayner of Markel Gayner Asset Management Corp, Wallace Weitz of Weitz Wallace R & Co, Arnold Van Den Berg of Century Management, Brian Rogers of T Rowe Price Equity Income Fund, Brian Rogers of T Rowe Price Equity Income Fund, PRIMECAP Management, Chris Davis of Davis Selected Advisers, Warren Buffett of Berkshire Hathaway, Richard Snow of Snow Capital Management, L.P., Richard Aster Jr of Meridian Fund, Richard Aster Jr of Meridian Fund, Kenneth Fisher of Fisher Asset Management, LLC, Kenneth Fisher of Fisher Asset Management, LLC.
United Parcel Service Inc. is the world's largest express carrier the world's largest package delivery company and a leading global provider of specialized transportation and logistics services. Their primary business is the time-definite delivery of packages and documents throughout the United States and in over 200 other countries and territories. They have established a vast and reliable global transportation infrastructuredeveloped a comprehensive competitive and guaranteed portfolio of servicesand consistently supported these services with advanced technology. United Parcel Service, Inc. has a market cap of $55.58 billion; its shares were traded at around $55.83 with a P/E ratio of 17.6 and P/S ratio of 1. The dividend yield of United Parcel Service, Inc. stocks is 3.2%. United Parcel Service, Inc. had an annual average earning growth of 17.2% over the past 5 years.
Highlight of Business Operations:
U.S. domestic package revenue decreased $786 million, or 10.2%, for the quarter, due to a 4.3% decrease in average daily package volume and a 4.6% decrease in revenue per piece.Next Day Air volume, deferred air volume and ground volume declined 0.7%, 1.0%, and 5.0%, respectively during the quarter, primarily as a result of weakness in the U.S. economy. Continued declines in industrial production and retail sales have reduced overall demand in the U.S. small package market, resulting in decreased package volume in our domestic package operations. The decline in air volume was partially mitigated by market share gains, as a result of the recent departure of a competitor in the U.S. market.
The decrease in overall revenue per piece of 4.6% resulted primarily from lower fuel surcharge rates, lower package weights, and unfavorable shifts in product mix. Next Day Air and Deferred revenue per piece decreased 13.8% and 11.7%, respectively, and were negatively affected by an approximate fifteen percentage point decline in the fuel surcharge rate for air products (discussed further below). Additionally, the revenue per piece decline for our air products was also impacted by lower average package weights and a mix shift toward lower yielding products, reflecting the economic recession in the United States. Ground revenue per piece decreased 1.5%, primarily due to a lower fuel surcharge rate. The factors decreasing revenue per piece for our ground and air products were partially offset by an increase in base rates that took effect during the quarter.
We also modified the fuel surcharge on domestic air services by reducing the index used to determine the fuel surcharge by 2%. This fuel surcharge continues to be based on the U.S. Energy Departments Gulf Coast spot price for a gallon of kerosene-type jet fuel. Based on published rates, the average fuel surcharge on domestic air products was 3.69% in the first quarter of 2009, a decrease from the 18.84% in the first quarter of 2008, due to the significant decrease in jet fuel prices, in addition to the 2% reduction in the index. The ground fuel surcharge rate continues to fluctuate based on the U.S. Energy Departments On-Highway Diesel Fuel Price. Based on published rates, the average fuel surcharge on domestic ground products decreased to 3.58% in the first quarter of 2009 from 6.17% in the first quarter of 2008, due to significantly lower diesel fuel prices. Total domestic fuel surcharge revenue, net of the impact of hedging, decreased by $263 million in the first quarter of 2009 compared with the same period of 2008, primarily due to the lower fuel surcharge rates discussed above, as well as the decline in volume for our air and ground products.
International Package revenue declined $519 million, or 18.8%, for the quarter, primarily as a result of a 1.0% decline in package volume and a 15.3% decrease in total revenue per piece.
decreased 13.7% for the quarter, largely due to the adverse impact of currency exchange rates, lower fuel surcharge rates, and the relatively higher growth in lower revenue per piece transborder products, but was partially offset by base rate increases that took effect in the first quarter of 2009. Domestic revenue per piece decreased 18.9% for the quarter, and was primarily caused by adverse currency exchange rate fluctuations (currency-adjusted domestic revenue per piece only declined 1.8%), as well as the impact of lower fuel surcharge rates. Total average revenue per piece decreased 9.3% on a currency-adjusted basis, and the overall change in segment revenue was negatively affected by $172 million due to currency fluctuations, net of hedging activity.
Read the The complete ReportUPS is in the portfolios of Tom Gayner of Markel Gayner Asset Management Corp, Wallace Weitz of Weitz Wallace R & Co, Arnold Van Den Berg of Century Management, Brian Rogers of T Rowe Price Equity Income Fund, Brian Rogers of T Rowe Price Equity Income Fund, PRIMECAP Management, Chris Davis of Davis Selected Advisers, Warren Buffett of Berkshire Hathaway, Richard Snow of Snow Capital Management, L.P., Richard Aster Jr of Meridian Fund, Richard Aster Jr of Meridian Fund, Kenneth Fisher of Fisher Asset Management, LLC, Kenneth Fisher of Fisher Asset Management, LLC.
