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Roy C. Liljebeck (206) 281-1003
SEATTLE -- October 26, 1998
Airborne Freight Corporation (NYSE: ABF), which operates under the trade name Airborne Express, today reported net earnings of $32,813,000, or $.65 per diluted share, for the third quarter ended September 30, 1998. Comparisons of the current period results with the prior year are not particularly meaningful, as the company benefited in the third quarter of 1997 from a strike at United Parcel Service which added $50-$55 million in incremental domestic revenues and increased diluted earnings per share results by $.28 to $.30. Total net earnings for the third quarter of 1997 were $46,619,000 or $.94 per diluted share.

Total revenues for third quarter 1998 were $769,082,000 versus $788,598,000 for the same period in 1997. Domestic revenues were $678,650,000 compared to $687,549,000 last year, and international revenues were $90,432,000 in 1998, versus $101,049,000 in the 1997 period.

Net earnings for the first nine months of 1998 increased 11.0 percent to $99,000,000, or $1.94 per diluted share, compared to last year’s $89,280,000, or $1.84. Total revenues for the first nine months of 1998 were $2,283,412,000, a 6.0 percent increase over last year’s $2,156,904,000. Domestic revenues increased 8.0 percent to $2,013,546,000, versus $1,861,659,000 in the 1997 period. International revenues for the first nine months decreased 8.5 percent to $269,866,000, compared to $295,245,000 last year.

Airborne’s total number of shipments during third quarter 1998 were 80,647,000, compared to 80,748,000 in 1997. Domestic shipments totaled 79,020,000 in the third quarter of 1998, versus 79,279,000 last year. International shipments were 1,627,000, compared to 1,469,000 last year. As was the case with domestic revenues and net earnings, domestic shipment comparisons for this year’s third quarter are difficult because of the UPS strike in the 1997 third quarter.

"While year-to-year comparisons are difficult, we have been tracking sequential period results," said Airborne’s Chief Financial Officer, Roy Liljebeck. "Because of weaker economic conditions, we did not experience the normal seasonal pickup in July and August, but we did see some improvement in business in September. Given the lack of normal sequential growth in the third quarter, we are pleased with the operating results and the 7.2 percent operating margin. This was possible largely because of the improvement in the domestic yield, as measured by revenue per shipment, which was $8.59 in the third quarter versus $8.49 in this year’s second quarter," continued Liljebeck.

"International heavy weight freight continues to decline, year to year and sequentially, but with double digit growth in international small package express, and better margins on the remaining heavy weight freight, margins on overall international business remains reasonably stable," concluded Liljebeck.

For more than 50 years, Airborne Express has served the 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, air freight, ocean service, and logistics management.

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