United Parcel Service Inc, the world's largest package delivery company, on Thursday reported sharply higher quarterly net income, driven by higher volumes of US and international package shipments.
The Atlanta-based company reported second-quarter profit of $986 million, or 88 cents a share, compared to a year-earlier profit of $818 million, or 72 cents a share. Total revenue jumped to $10.2 billion from $8.9 billion in the same period a year earlier.
UPS's earnings were just ahead of its most recent financial target of 82 cents to 87 cents a share. Revenue was in line with the $10 billion that analysts, on average, had forecast, according to Reuters Estimates.
"It's good news - the question is whether it's enough to push the stock higher because the stock's already at a premium valuation," said Donald Broughton, the transportation analyst with AG Edwards. "They're still losing market share, just not at as fast a rate as they were."
UPS forecast third-quarter earnings of 81 cents to 87 cents a share, in line with analyst expectations of 84 cents a share. The company also nudged up its target for annual per-share earnings to a rise of 18 percent to 20 percent, versus a previous forecast of 16 percent to 20 percent growth.
The improved results demonstrate the benefits that UPS has reaped from an increase in global trade and a rise in direct-to-consumer shipping from electronic commerce.
For the second quarter, total US average domestic package volume growth was 3.2 percent. Average revenue per average US domestic package grew 2.4 percent - just below FedEx's level of 3 percent in its most recently concluded quarter.
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