United Parcel Service (NYSE:UPS) as a company is the premier source for global transportation and logistic solutions. Founded in 1907, for more than a century, the company has been providing solutions for shipping throughout the global market. The company does business all around the world, with its largest domestic hub in Louisville, Ky, but also boasting major international distribution hubs in Cologne, Germany and Taipei, Taiwan.
According to the report published by Trinity University in February of 2011, less than a year ago, UPS is the only competitor in the industry that offers all levels of service (express, ground, international, domestic, residential, and commercial) and does so through its integrated pickup and delivery network. This is done using a sustainable fleet of vehicles that operate using compressed natural gas, liquified natural gas, hydrogen fuel cells, propane, electric and hybrid electric power plants.
In addition to its sustainability, United Parcel Service also has a variety of logistical partnerships with retail, healthcare, and high tech companies such as Amazon(NYSE:AMZN), Merck(NYSE:MRK), and Toshiba(SEA:TOS) giving them a strong base in many of today’s most powerful industries and a customizable supply chain. Financially speaking, the company has also seen a 6 year average ROE of 28% compared to their leading competitor, Federal Express(NYSE:FDX) of only 10% despite UPS’s vast networks.
According to the 3rd Quarter 2011 company conference call, as stated by company CEO D. Scott Davis, the company experienced a 9% increase in exports in the European theater, despite all the concerns in the European economy in the last year. Also, recent signing of critical trade agreements with South Korea, Columbia, and Panama are strong indicators of export growth in these markets as well.
Other highlights of the recent conference call include mention of recently rolled out innovative products such as UPS My Choice, which provides consumers with unparalleled delivery options, putting control in the hands of the residential customer, while having the added secondary benefit of lowering costs by eliminating multiple delivery attempts. Since its recent launch, as reported during the conference call, there are currently over 100,000 subscribers and growing.
Continued growth in the European market has prompted the company to expand their Cologne hub with a planned $200 million dollar budget to put in state-of-the-art equipment and expand the overall capacity of the facility by more than 70% overall.
On the financial front, during the conference call, company CFO, Kurt Kuehn reports that UPS experienced strong revenue growth of 8% with earnings per share up in the double-digits at 14% and the US Domestic operating margin experiencing its highest improvement in 3 years, up 60 basis points to 13.1% with an almost 7% increase in revenue on flat daily package growth. Focus on quality of revenue also paid off yields up 6.5%.
Overall the company shows nothing but growth potential in the market, with expanded coverage and new planned technological and strategic improvements all in the works.