United Parcel Service (UPS) has reported a 2.39 percent rise in profit for the quarter ended Mar. 31, 2017. The company has earned $1,158 million, or $1.32 a share in the quarter, compared with $1,131 million, or $1.27 a share for the same period last year.
Revenue during the quarter grew 6.22 percent to $15,315 million from $14,418 million in the previous year period. Total expenses were 88.35 percent of quarterly revenues, up from 87.36 percent for the same period last year. That has resulted in a contraction of 100 basis points in operating margin to 11.65 percent.
Operating income for the quarter was $1,784 million, compared with $1,823 million in the previous year period.
However, the adjusted operating profit for the quarter stood at $1,904 million.
"Revenue came in strong this quarter with all segments adding to the topline," said David Abney, UPS chairman and CEO. "We are accelerating investments to create the industry’s leading smart global logistics network and value-creating portfolio. UPS customers are benefiting from expanded capacity, choice and improved time-in-transit, while technology solutions continue to deliver efficiencies."
For financial year 2017, the company projects diluted earnings per share to be in the range of $5.80 to $6.10 on adjusted basis.
Operating cash flow drops significantly
United Parcel Service has generated cash of $239 million from operating activities during the quarter, down 91.05 percent or $ 2,431 million, when compared with the last year period.
The company has spent $920 million cash to meet investing activities during the quarter as against cash outgo of $1,108 million in the last year period.
The company has spent $124 million cash to carry out financing activities during the quarter as against cash outgo of $440 million in the last year period.
Working capital drops significantly
United Parcel Service has witnessed a decline in the working capital over the last year. It stood at $88 million as at Mar. 31, 2017, down 96.87 percent or $2,726 million from $2,814 million on Mar. 31, 2016. Current ratio was at 1.01 as on Mar. 31, 2017, down from 1.25 on Mar. 31, 2016.
Days sales outstanding went down to 21 days for the quarter compared with 42 days for the same period last year.
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