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Roy C. Liljebeck (206) 281-1003
SEATTLE -- July 27, 1998
Airborne Freight Corporation (NYSE: ABF), which operates under the trade name Airborne Express, today reported earnings for the second quarter of 1998. Net earnings were $33,827,000, or $.66 per diluted share, for the second quarter ended June 30, 1998. This compares to net earnings of $28,287,000, or $.59 per share, for the same period last year.

Total revenues for the second quarter were $764,137,000, an increase of 7.0 percent over 1997 revenues of $712,784,000. Domestic revenues of $672,378,000 were 10.0 percent higher than 1997 revenues of $611,999,000. International revenues decreased 9.0 percent to $91,759,000, versus last year’s revenues of $100,785,000.

Net earnings for the first six months of 1998 increased 55.0 percent to $66,187,000, or $1.29 per diluted share, compared to last year’s $42,661,000, or $.90 per share. Total revenues for the first six months of 1998 were 10.5 percent higher at $1,514,330,000, compared to $1,368,306,000 for the same six month period in 1997. Domestic revenues were $1,334,896,000, an increase of 13.5 percent over 1997 revenues of $1,174,110,000. International revenues for this period were $179,434,000, a 7.5 percent decrease from 1997 revenues of $194,196,000.

Airborne’s total number of shipments for second quarter 1998 increased 9.0 percent to 80,730,000, versus 74,134,000 in second quarter 1997. Domestic shipments reached 79,110,000, an increase of 9.0 percent over last year’s shipments of 72,741,000. International shipments gained 16.5 percent to reach 1,620,000 compared to 1,393,000 for the same period in 1997. Total shipments for the first six months of 1998 were 160,473,000, up 12.0 percent over the 143,117,000 reported in 1997.

"We are pleased with the operating results for the second quarter ended June 30," said Airborne’s Chief Financial Officer Roy Liljebeck. "In spite of what appears to be a slowing in the economy in the second quarter, the overall growth in shipments and revenue was positive, and operating margin was 7.7 percent, the same as experienced in last year’s second quarter and this year’s first quarter, when growth rates were higher.

"Of particular note in the domestic business was the growth rate in the higher yielding overnight segment which increased 10.3 percent versus a total domestic growth rate of 9.0 percent. This helped the domestic yield per shipment improve to $8.49 per shipment, versus $8.40 in last year’s second quarter which at that time was aided by a 2 percent fuel surcharge," continued Liljebeck.

"Internationally, we continued to experience a decline in heavy weight, high revenue freight shipments, and therefore a 9.0 percent decline in total international revenue. However, with 18.5 percent growth in higher margin international express shipments, the gross margin for international was comparable to prior periods.

"Last, productivity and the operating cost per shipment both improved 1.5 percent in the quarter versus the same period last year," concluded Liljebeck.

For more than 50 years, Airborne Express has served shipping needs of business customers around the world. Today, Airborne offers total distribution solutions by providing time-sensitive delivery of documents, letters, small packages, and freight to virtually every U.S. ZIP code and more than 200 countries. Customers can select from a variety of services including same-day, next-morning, next-afternoon or second-day delivery, ocean service, and logistics management.

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