United Parcel Service, Inc. (NYSE:UPS) Q3 2017 Earnings Conference Call Transcript

Oct 26, 2017 • 08:30 am ET


United Parcel Service, Inc. (NYSE:UPS) Q3 2017 Earnings Conference Call Transcript


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Good morning. My name is Steven, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the UPS Investor Relations Third Quarter 2017 Earnings Conference Call. (Operator Instructions)

It is now my pleasure to turn the floor over to your host, Mr. Scott Childress, IR Officer. Sir, the floor is yours.

Scott Childress

Good morning, and welcome to the UPS third quarter 2017 earnings call. Joining me today are David Abney, our CEO; Richard Peretz, our CFO; along with International President, Jim Barber; President of U.S. Operations, Myron Gray; and Chief Commercial Officer, Alan Gershenhorn. Also joining us today is Kate Gutmann, our Chief Sales and Solutions Officer.

(Forward-Looking Cautionary Statements)

The webcast of today's call, along with the reconciliation of GAAP and non-GAAP financial measures, are available on the UPS Investor Relations website. Webcast users can submit live questions during today's call. We will focus on answering questions of a long-term and strategic nature. Callers are asked to submit only one question, so that we may allow as many as possible to participate.

Now I will turn the call over to David.

David Abney

Thanks, Scott, and good morning, everyone. Again, this quarter, we are reporting solid UPS results, with revenue gains and good execution in our segments.

Our performance is driven by UPS' high-value solutions, broad portfolio of services, efficient global network and strategic investments. Let me first take a moment to recognize the difficult conditions created by several recent natural disasters and the incredible way our team responded to these challenges.

Some of the communities we serve have been severely impacted, and we've been focused on restoring service to those areas. I want to express my personal appreciation to thousands of UPSers around the world for their dedication, working side-by-side in their communities and on their routes delivering life-sustaining supplies.

In addition, the UPS Foundation committed more than $3 million to support the relief efforts throughout the U.S., Caribbean and Mexico. I can't emphasize enough how proud we are of the UPS team and their great work. It's this kind of teamwork that gives me confidence that we're well prepared to carry momentum forward to deliver a successful peak season. Kate Gutmann will provide details on peak at the conclusion of my comments.

Now let's take a look at the Company's performance. During the quarter, our focused execution, combined with our ability to capitalize on market opportunities, enabled UPS to meet our financial expectations. Our e-commerce and cross-border solutions helped UPS deliver strong revenue growth of 7% or a 4.6% increase in daily shipments.

In the U.S., increasing demand for UPS Next Day Air and Ground products drove revenue growth. The focus on fundamentals, combined with the benefits of recent investments, produced good results, especially when you consider the unexpected headwinds we faced.

The International segment continues to serve as a growth engine for the business, producing record third quarter operating profits. Several actions taken this quarter were designed to accelerate that growth in