UPS's Revenue Tops Views
October 27 2016 - 9:50AM
Dow Jones News
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)
Copyright (c) 2016 Dow Jones & Company, Inc.
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