United Parcel Service, Inc. (NYSE:UPS) reported first quarter earnings that topped Wall Street expectations, helped by e-commerce and export shipments. Excluding one time items, the first quarter earnings rose 4 percent to $1.04, while net income surged 7 percent to $1.04 billion. Revenues increased 2.3 percent from $13.14 billion in the first quarter of the previous year to $13.43 billion.

United Parcel Service, Inc. (UPS) Q1 Earnings Beat Estimates

Analysts were expecting $1.01 per share excluding one time items on revenues of $13.46 billion. Operating margins declined from 11.9 percent to 11.8 percent. Segment wise, revenues from International Package went up 0.3 percent, Domestic Package business gained 3.4 percent, while Supply Chain & Freight business revenues gained 0.9 percent during the quarter. Operating expenses also increased 2.5 percent.

The world’s largest package-delivery company said that a better than expected post-holiday season boosted revenues. Global exports volume surged 3.8 percent, due to an 8 percent rise in shipments to Asia.

United Parcel Service, Inc. (NYSE:UPS) chief financial officer Kurt Kuehn said during a conference call, that traditional retailers are now using their brick-and-mortar stores as distribution sites. They take orders online and offer ultimate residential delivery. So, pickups at retail stores have increased for delivering the goods at the consumer’s doorstep.

Consumers are increasingly shifting their focus from costly air express to cheaper modes, which has benefited United Parcel Service Inc. (NYSE:UPS) as its biggest rival FedEx Corporation (NYSE:FDX) focuses more on air shipments. United Parcel Service, Inc. (NYSE:UPS) expects global economic uncertainty to continue, but the company reaffirmed its full-year earnings guidance of $4.80-$5.06 per share.

United Parcel Service, Inc. (NYSE:UPS) also said that it will acquire Cemelog Zrt, a Hungary-based pharmaceutical logistics company to boost its presence in Europe. However, it didn’t disclose the terms of the deal. United Parcel Service had earlier made a $7 billion offer to buy TNT Express, a European delivery firm, in January. But it dropped the bid after European regulators said that the deal is unlikely to happen due to anti-trust issues.

The company plans to repurchase $5 billion worth of shares in 2013. It bought back shares for $1 billion in the first quarter.

Deutsche Bank AG (NYSE:DB) (ETR:DBK) analyst Justin Yagerman said that results were driven by better than expected 4.4 percent growth in the domestic daily package volume, which was above Deutsche Bank estimate of 2.1 percent. Volume growth more than compensated for the weaker-than-expected yield improvement. Deutsche Bank said that the acquisition of Cemelog will help the company expand its International Package segment.

Deutsche Bank AG (NYSE:DB) (ETR:DBK) has a Buy rating on the stock with a $99 price target. United Parcel Service, Inc. (NYSE:UPS) shares were up 1.82 percent to $85.02 at 11:58 AM EDT.