UPS more than doubles 3Q profit

GLENDALE, CA - JULY 22: A United Parcel Service (UPS) driver delivers packages on July 22, 2010 in Glendale, California. UPS said its second quarter profit nearly doubled posting a net profit of $845 million, or 84 cents a share, compared to $445 million or 44 cents a year ago. (Photo by Kevork Djansezian/Getty Images) Kevork Djansezian

A pickup in deliveries helped UPS more than double its profit from a year ago, when the company took a hit from pension-restructuring costs.

UPS delivered more than 1 billion packages in the quarter, an increase of 4.6 percent, led by gains in international-export and U.S. ground shipments.

The company said it continued to see international customers shifting to cheaper shipping options.

United Parcel Service Co. (UPS) said Friday that net income in the third quarter soared to $1.10 billion, or $1.16 per share. That was a penny better than analysts expected and an increase over the $469 million, or 48 cents per share, that UPS earned a year ago.

Revenue rose 3.4 percent to $13.52 billion, which was below analysts' forecast of $13.59 billion, according to FactSet.

Expenses declined 4.8 percent. Spending on compensation and benefits fell 8.1 percent from a year ago, when UPS took a charge of $896 million to restructure New England pension obligations.

The company said it was standing by its forecast of full-year earnings between $4.65 and $4.85 per share. Analysts expect $4.74 per share.

Delivery companies expect a pickup in business during the fourth quarter as they handle holiday gift shipments. This week, FedEx Corp. predicted volumes on peak December days will rise by double-digit percentages over last year.

UPS chief financial officer Kurt Kuehn said, "Although some major retailers have expressed caution about holiday spending, they still expect robust online sales." He said this year's late Thanksgiving holiday, Nov. 28, will create delivery challenges by compressing the peak season.

Shares of UPS rose $2.29, or 2.4 percent, to $96.78 in premarket trading about an hour before the market opening. Through Thursday, the stock was up 28 percent for the year.

Comments

CBSN Live

pop-out
Live Video

Market Data

Watch CBSN Live

Watch CBS News anytime, anywhere with the new 24/7 digital news network. Stream CBSN live or on demand for FREE on your TV, computer, tablet, or smartphone.

Market News

Stock Watchlist