UPS reports nearly 28% jump in third quarter profit
United Parcel Service, the world’s largest shipping carrier, reported a nearly 28 percent jump in third-quarter profit on strong revenue, citing better domestic business, particularly in next-day air volume. The results beat Wall Street expectations.
Atlanta-based UPS said Tuesday it earned $739 million, or 65 cents a share, for the three months ending Sept. 30, compared with a profit of $578 million, or 51 cents a share, for the same period a year ago.
Excluding one-time items gains due to the sale of a business unit and a favorable tax ruling _ UPS said it earned $702 million, or 62 cents a share, for the July-September quarter. Analysts surveyed by Thomson First Call were expecting earnings of 60 cents a share excluding one-time items.
Revenue rose 7 percent to $8.31 billion from $7.75 billion for the same quarter a year ago.
“While there were many highlights in the quarter, the accelerated growth in U.S. package deliveries, increasing signs of U.S. economic growth and the strong international performance really stand out,” said chief financial officer Scott Davis.
The company’s U.S. package business grew 3.2 percent, or 374,000 packages a day, in the quarter compared to the prior-year period. Next-day air volume increased 10.2 percent.
The earnings news comes as UPS continues efforts to branch out beyond its traditional package delivery service. UPS and rival FedEx are scrambling to embed their online shipping tools into the business software and Web sites their customers use most.
UPS says the volume of packages the company has delivered for people using third-party software has doubled since 2001, and more than 60,000 businesses have now licensed the company’s online tools and integrated them into their Web sites.
Earlier this year, UPS unveiled a new look to its logo that got rid of the familiar string-tied box that has adorned the corporate logo since 1961 in favor of a simpler brown and gold shield. The company also added the slogan “Synchronizing the World of Commerce” to its aircraft, its brown package trucks and new retail stores.
For the first nine months of the year, UPS earned $2.04 billion, or $1.80 a share, compared with $1.68 billion, or $1.48 a share, a year ago. Nine-month revenue was $24.55 billion compared to $23.02 billion in 2002.
In the fourth quarter, Davis said the company expects earnings of 65 cents to 70 cents a share. Analysts are expecting earnings of 66 cents a share.
