United Parcel Service Inc. said Tuesday that first-quarter
earnings rose 14%, boosted by growth in its domestic business.
Earnings beat expectations, though revenue fell short. Shares of
UPS, relatively flat over the past year, rose 1.6% in light
premarket trading to $99.
"Solid performance across all three business segments was led by
positive momentum in international, gains from revenue management
and productivity improvements in the U.S.," UPS Chief Financial
Officer Kurt Kuehn said.
The company reaffirmed its guidance for full-year per-share
earnings between $5.05 and $5.30.
Overall, for the first quarter, UPS posted earnings of $1.03
billion, or $1.12 a share, up from $911 million, or 98 cents a
share a year earlier.
Revenue grew 1.4% to $13.98 billion.
Analysts had expected earnings of $1.09 on revenue of $14.27
billion, according to Thomson Reuters.
Total company shipments increased 2.8% to 1.1 billion
packages.
In the domestic segment, first-quarter revenue grew 3.8% to $8.8
billion as daily package volume increased by 2.4%. The Deferred Air
program grew 12% while UPS SurePost rose 77%. However, shipment
growth rates slowed because the company said it wouldn't renew
lower-yielding contracts.
Sales in the international segment fell 5%, though they would
have improved 2.4% were it not for the negative effect of the
strong dollar. However, world-wide export yield fell 5.2% because
of lower fuel surcharges.
In the supply and freight segments, growth in distribution and
UPS Freight boosted revenue 1.3% to $2.2 billion. The distribution
business, however, benefited from more customers in the health-care
and retail industries, the company said.
Write to Angela Chen at angela.chen@dowjones.com
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