UPS posts earnings of $1.57 a share vs $1.42 expected

UPS CEO: Record profits internationally

Package delivery company United Parcel Service on Tuesday reported significantly higher quarterly net profit as it boosted its margins and performed well during the peak holiday season.

UPS posted fourth-quarter earnings per share of $1.57, compared to $1.25 a share in the year-earlier period. Revenue rose to $16.05 billion from $15.90 billion.

Analysts expected the company to report earnings per share of $1.42 on revenue of $16.28 billion, according to a Thomson Reuters consensus estimate.

UPS shares were up modestly late morning Tuesday.

The company also forecast full-year earnings of $5.70 to $5.90 a share, compared with expectations of $5.73 a share.

The Atlanta-based UPS was under pressure to deliver in the fourth quarter, after two disappointing peak seasons in a row. In 2013 it was hit by a late surge in e-commerce packages, leaving many stranded on Christmas Eve. In 2014, the company overspent for a package surge that did not materialize.

Just to see UPS "all around the world determined to show that once again we can handle peak season, and we can deliver from a service standpoint and we can deliver from a financial standpoint and, most importantly, got our packages delivered Christmas Eve on time," UPS CEO David Abney told CNBC's "Squawk on the Street" on Tuesday.

The company said in December it made its Christmas deliveries on time, after two straight years of problems during the peak holiday season.

In the week running up to Dec. 24, UPS had an on-time delivery rate of between 97 and 98 percent, a UPS spokesman told Reuters.

An Amazon.com worker sorts packages onto a conveyor belt at an Amazon fulfillment center in Tracy, California.
Is Amazon going to cut UPS, FedEx out?

Rival shipping company FedEx struggled, however, due to a "surge of last-minute e-commerce shipments," according to Reuters.

Concerns about UPS' relationship with Amazon were raised in December, after a report raised the possibility of the e-commerce giant emerging as a rival in a bid to process rising package volumes and offset higher shipping costs.

Abney said on Dec. 29 that he is "very comfortable" with his company's relationship with Amazon.

UPS' stock has fallen more than 1 percent year to date.

— CNBC's Tom DiChristopher and Reuters contributed to this report.