(Adds company statement, details on segment performance)
SEATTLE/DETROIT, July 27 (Reuters) - United Parcel Service Inc on Thursday reported a higher-than-expected quarterly net profit, citing a jump in ecommerce deliveries in its U.S. domestic package service and confirmed its forecast for 2017.
The world's largest package delivery company said revenue at its core U.S. domestic package service rose 8 percent during the quarter to $9.7 billion. Revenue per package in the domestic unit was up 3 percent versus the second quarter of 2016, reflecting the fact that they raised prices.
Like its main rival FedEx Corp, UPS has experienced a boom in ecommerce packages over the last decade. But the boom has come at a price, as both companies have had to invest heavily in their networks to handle the extra business.
The Atlanta-based company posted second-quarter net income of $1.4 billion or $1.58 per share, up nearly 8 percent from $1.3 billion or $1.43 per share a year earlier. Analysts had expected earnings per share of $1.47, according to Thomson Reuters I/B/E/S.
UPS said higher fuel surcharges and workers' compensation contributed 10 cents per share to earnings in the quarter.
Richard Peretz, UPS's chief financial officer, said in a statement the results were in line with the company's expectations.
"Looking at the second half of the year, our core business performance will continue to produce solid results," Peretz said.
The company said it expects full-year earnings per share in a range from $5.80 to $6.10. Analysts expect earnings per share for the year of $5.95.
In light premarket trading, UPS shares were up 1.5 percent at $114.
The company said revenue in its international segment was up 2.8 percent but operating profit fell nearly 5 percent, hurt by the strength of the U.S. dollar.
UPS also said revenue in the supply chain and freight segment was up 12 percent, reflecting improving market conditions.
The company said it was investing more in its network to handle the additional volume associated with ecommerce.
Like FedEx, UPS has struggled with the expense of "the last mile" associated with delivering to residential addresses. The cost per package to businesses is typically lower because they receive more deliveries.
UPS said year-to-date capital expenditures to support investment strategies were $2 billion, and operating costs for facility construction and Saturday operations to handle growing ecommerce business increased costs by about $35 million.
(Reporting By Nick Carey and Eric M. Johnson; Editing by Nick Zieminski)