UPS reports $1 billion quarterly profit

UPS posted a profit of about $1 billion for the first three months of the year, saying strong post-holiday online shopping shipments drove the results.

The first quarter figure, announced Thursday, was an improvement over the Sandy Springs shipping giant’s $970 million profit in the first quarter of 2012.

Results in January benefited from online shopping for sales, gift card redemption and returns, UPS chief financial officer Kurt Kuehn said.

“The combination of all three of those led to a pretty busy time the first couple of weeks of January,” he said. The rest of the quarter returned to a more typical pace — and global economic uncertainty remains, he said.

“The U.S. domestic business continued to perform well while the international and supply chain segments faced some challenges,” Kuehn said. He said the quarterly results showed the company’s ability to adapt “in what may be seen as a turbulent economy.”

Revenue grew to $13.4 billion, up 2.3 percent from a year earlier.

The results included a $213 million currency gain from liquidating a foreign subsidiary after the company’s failed acquisition of European competitor TNT, offset by $177 million for the termination fee and other costs. The deal was blocked by a European Commission decision.

UPS also announced Thursday it will acquire Hungarian pharmaceutical logistics company Cemelog, but did not say how much it will pay. The purchase is “relatively small in UPS terms,” Kuehn said, but Cemelog’s 255,000 square feet of health care distribution space and presence in Central and Eastern Europe are valuable, he said.

Looking forward, UPS expects to benefit from growth of consumerism internationally in coming years.

“UPS is one of the few companies in the world that not only takes advantage of trends but can actually influence trends,” Kuehn said. In the United States, he said, UPS has helped drive e-commerce growth by offering retailers shipping and logistics options, and it is increasing its focus on e-commerce growth in Europe.

The company also announced late Thursday that it had reached tentative labor agreements with the Teamsters union, which represents package and freight operation employees.