UPS Profits Rise on Higher Shipments

By Joshua Jamerson 

United Parcel Service Inc. on Friday reported profit rose 3.2% in the latest period, though higher fuel costs cut into climbing revenue from its U.S. and international package deliveries.

UPS has been trying to make e-commerce as profitable as its traditional business-to-business deliveries. It posted some success in the first quarter as it sought to increase profitability by investing in software to improve delivery routes, among other changes.

Oil prices rose during the latest quarter, and UPS said lower fuel surcharges in the quarter hurt results. The company's fuel surcharges are typically tacked onto shipments to cover that cost, but they lag rising fuel prices by a couple months.

Revenue rose 2.4% in the U.S. package segment and 1.1% in the international package segment. Average daily shipments in the U.S. increased 2.5%, helped in part by solid performance in its next-day air service. Supply chain and freight revenue increased 13%, helped by last year's acquisition of Coyote Logistics.

Over all for the June period, UPS posted earnings of $1.27 billion, or $1.43 a share, compared with $1.23 billion, or $1.35 a share, a year earlier. The per-share figure was helped by a lower share count in the latest period.

Revenue increased 3.8% to $14.63 billion. On a currency-neutral basis, revenue rose 4%, UPS said.

Analysts had expected earnings of $1.43 a share on revenue of $14.63 billion.

UPS backed its earnings guidance of $5.70 to $5.90 a share.

Shares edged 0.5% higher premarket to $109.25.

Write to Joshua Jamerson at [e-mail]

(END) Dow Jones Newswires

July 29, 2016 08:32 ET (12:32 GMT)

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