GO
Loading...

UPS Earnings Edge Forecasts on Strong International Business

Reuters
Tuesday, 24 Jul 2007 | 11:06 AM ET

United Parcel ServiceTuesday posted a better-than-expected profit, citing a boost from global markets, plus its supply chain and freight units that offset a slower U.S. small-package market.

"It's a solid but not spectacular quarter," said David Sandell, a portfolio manager at New York-based Leeb Capital Management, which manages assets of $170 million and holds a small position in UPS after selling off most of its shares recently.

"International growth is strong and that's where their future lies."

A hydraulic hybrid UPS delivery truck is seen with the Philadelphia skyline in the background during a demonstration in Philadelphia, on Friday, June 23, 2006. The UPS truck uses an Environmental Protection Agency patented hydraulic hybrid technology that the EPA claims will increase fuel efficiency by 60 to 70 percent. Full hydraulic hybrid technology means that the conventional transmission and transfer case have been removed and replaced with a hydraulic drivetrain. (AP Photo/Matt Rourke)
Matt Rourke
A hydraulic hybrid UPS delivery truck is seen with the Philadelphia skyline in the background during a demonstration in Philadelphia, on Friday, June 23, 2006. The UPS truck uses an Environmental Protection Agency patented hydraulic hybrid technology that the EPA claims will increase fuel efficiency by 60 to 70 percent. Full hydraulic hybrid technology means that the conventional transmission and transfer case have been removed and replaced with a hydraulic drivetrain. (AP Photo/Matt Rourke)

The world's largest package delivery company reported second-quarter net income of $1.10 billion, or $1.04 a share, compared with $1.06 billion, or 97 cents a share, a year earlier.

Wall Street analysts, on average, had expected earnings per share of $1.03, according to Reuters Estimates.

The Atlanta-based company reported revenue for the quarter of $12.19 billion, up from $11.74 billion in the same quarter in 2006.

Analysts had expected revenue of $12.26 billion.

Revenue from UPS's U.S. small-package business rose to $7.58 billion from $7.46 billion, although average daily package volumes slid to 13.23 million from 13.25 million.

Revenue at the company's international business increased to $2.50 billion from $2.23 billion, with total export volume up 10.4%.

Asia export volume growth jumped 25%, with "particularly strong growth out of China." Europe also posted a double-digit export volume gain, the company said.

"Strong gains in our international package segment offset a lack of growth in the U.S. business," UPS Chief Executive Mike Eskew said in a statement. "We remain confident in the long-term growth prospects that the dynamic global marketplace offers UPS."

UPS said that in the third quarter it expects earnings per share in a range of 99 cents to $1.04.

Chief Financial Officer Scott Davis said in a statement that its U.S. small-package business more closely correlates to U.S. economic trends "and as a result we should see gradual volume growth in our U.S. package business."

  Price   Change %Change
UPS
---

Featured

Contact U.S. News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    › Learn More

Don't Miss

U.S. Video