UPS United Parcel Service

United Parcel Service Inc. reported that revenue rose above expectations in its latest quarter as domestic deliveries grew, though it pulled in less revenue from fuel surcharges on the packages it ships.

UPS has been trying to make e-commerce as profitable as its traditional business-to-business deliveries. During the quarter, UPS said average daily shipments in the U.S. increased 5.7%, driven by e-commerce. Deferred air shipments, meanwhile, climbed 10% and next-day air gained 5.9%.

The company said lower fuel surcharges in the quarter hurt results, denting revenue growth by 50 basis points. Still, revenue rose 4.8% in the U.S. package segment and 2.2% in the international package segment. Supply chain and freight revenue grew 8.1, helped by last year's acquisition of Coyote Logistics.

Chief Financial Officer Richard Peretz said the company is meeting its expectations, and has "taken the necessary steps to ensure we capitalize on record volume levels during peak season."

In all for the September quarter, earnings inched up to $1.27 billion, or $1.44 a share, compared with $1.26 billion, or $1.39 a share, a year earlier. The per-share figure was helped by a lower share count in the latest period.

Revenue climbed 4.9% to $14.93 billion, weighed by fuel surcharges and currency exchange rates. On a currency-neutral basis, revenue rose 5.1%, UPS said.

Analysts had expected earnings of $1.44 a share on revenue of $14.73 billion.

UPS backed its yearly guidance for adjusted earnings of $5.70 to $5.90 a share but warned the current quarter's profit could feel a "material" impact from a year-end mark-to-market pension-accounting adjustment.

Shares, inactive premarket, have risen 13% this year.

Write to Anne Steele at Anne.Steele@wsj.com

(END) Dow Jones Newswires

October 27, 2016 09:35 ET (13:35 GMT)

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