UPS posts earnings of $1.35 a share vs. $1.26 expected

UPS trucks at the UPS Worldport facility in Louisville, Kentucky.
Jody Gralnick | CNBC

United Parcel Service delivered quarterly earnings that surpassed analysts' expectations on Tuesday, as improved margins offset a slight drop in revenue.

After the earnings announcement, the company's shares rose in pre-market trading. (Get the latest quote here.)

The company posted second-quarter adjusted earnings of $1.35 per share, up from $1.21 a share in the year-earlier period.

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Total revenue fell 1.2 percent from a year ago to about $14.1 billion in the quarter. UPS said the strong U.S. dollar and lower fuel surcharges hurt revenue growth during the second quarter. When main rival FedEx reported quarterly results in June, the Memphis-based company said lower fuel surcharges had cut into revenue.

Analysts expected UPS to post earnings of $1.26 per share on $14.51 billion in revenue, according to a consensus estimate from Thomson Reuters.

The company expects full-year 2015 earnings per share in a range from $5.05 to $5.30, unchanged from its last earnings report in April, though the company added that it would be at the high end of that forecast.

"Even though the U.S. economy appears to be growing at a slower pace, our global portfolio and performance reinforces our expectations to attain the higher end of the guidance range." Chief Financial Officer Richard Peretz said in a statement.

Analysts, on average, expect full-year earnings per share of $5.19.

Volume growth and price increases boosted margins at its international package business.

The strong dollar drove down revenue for the company's higher-margin international package business more than 6 percent, while revenue in the U.S. domestic package market, by far its largest business, rose 1.6 percent.

UPS shares have fallen nearly 15 percent this year. The stock has helped to drag down the Dow Jones Transportation Average, which has dropped almost 12 percent in that period.

The shipping giant has moved to improve its logistics through acquisitions in recent months. Subsidiary UPS Capital announced earlier this month that it would buy the Insured Parcel Services segment of G4S International Logistics.

The company said the deal would help ensure security of valuable international parcel shipments like jewelry and watches. UPS is also in talks to buy Chicago-based Coyote Logistics for at least $1.8 billion, reported Reuters last week, citing sources.

Reuters contributed to this report.