USA domestic revenue increased to $9 billion, helped by technology and lower fuel costs, which lowered costs per unit compared to the same period a year ago, the company said. Its earnings edged up. Analysts surveyed by Zacks Investment Research expected $14.6 billion in revenue.
Advertisement
While UPS had a solid quarter, some investors may have expected an increase to its full-year forecast, said Stephens Inc. analyst Jack Atkins. UPS had a smooth holiday season last winter and was able to deliver a surge in packages ahead of Christmas in nearly all cases.
UPS shares were down 1 percent at $107.69 in morning trading.
UPS said second-quarter margins at its more lucrative worldwide package business were boosted by volume growth, strong pricing and improved network efficiency gains.
Revenue for the US domestic package unit climbed 4 percent, with average daily package volume up 2.5 percent.
Analysts are eager to ask UPS how it handled a midyear surge in packages on July 12, when Amazon.com Inc. offered discounts as part of its Prime Day promotion for select customers, said Bloomberg Intelligence analyst Lee Klaskow. Still, the strong USA dollar was a drag on profitability at the unit, UPS said.
The Atlanta-based company posted second-quarter net income of $1.27 billion, or $1.43 per share, up more than 3 percent from $1.23 billion, or $1.35 per share, a year earlier.
The results met the expectations of analysts polled by Zacks. UPS reiterated its full year EPS guidance of $5.70 to $5.90, compared to the FactSet consensus of $5.80.
Adjusted earnings rose to $1.43 a share, the company said in a statement Friday. Its shares are up more than 6 percent for the past year.
Share with Us – We’d love to hear eyewitness accounts, the history behind an article, and smart, constructive criticism.
Advertisement
“It’s not big companies that benefit; small and medium-sized enterprises need to compete and trade deals can make all the difference in the world to them”, Abney told Reuters.
