United Parcel Service reported a better-than-expected quarterly net profit on Thursday, boosted by rising U.S. ecommerce as consumers ordered more goods online, and the package delivery company reiterated its full-year 2016 outlook for earnings per share.
But executives warned that if a pension fund's proposed benefit cuts for participants gets federal government approval, UPS would have to record a charge of up to $3.8 billion this year.
Like its main rival, FedEx, UPS is often seen as a bellwether of U.S. economic activity.
The Atlanta-based company posted first-quarter net income of $1.13 billion or $1.27 per share, up 10 percent from $1.03 billion or $1.12 per share a year earlier. Analysts had on average expected earnings per share for the quarter of $1.22.
"What really is driving UPS right now is of course ecommerce, and the features that we've added over the past few years to enable ecommerce to be more efficient," Richard Peretz, chief financial officer of UPS, said on CNBC's "Squawk on the Street" on Thursday. "In fact, if you look at our results, our cost per piece is coming down, and we're really creating great economics for ecommerce today."