United Parcel Service Inc said increased demand in domestic ground shipments lifted profits in the third quarter and expects online sales to boost shipping volumes as it heads into the holiday quarter. Shares in the courier company rose 2 percent on Friday before the markets opened.
Shipment volume and forecasts at UPS, along with rival FedEx Corp, are closely watched by Wall Street and considered an indication of overall economic health because of the vast amount of goods they transport. For this year's holiday season, UPS said it expects peak season daily volume to increase by 8 percent, with pick-up volumes for Cyber Monday increasing 10 percent. Earlier in the week, rival FedEx forecast an 11 percent rise for the same day, the Monday after Thanksgiving that is traditionally a big day for online holiday sales.
For the third quarter, UPS said daily ground shipping volumes rose 3 percent, while next-day shipping fell 3.3 percent. Clients have been trading down from pricey next-day air deliveries to more affordable shipping ways that take more time, to save money. For the third quarter, the Atlanta-based company earned $1.10 billion, or $1.16 a share, compared with $469 million or 48 cents a share a year earlier. The company expects earnings of between $4.65 and $4.85 per share for the current year. Revenue came in at $13.52 billion, up 3.4 percent over last year, mainly helped by US e-commerce shipments and strong European export growth.