United Parcel Service, Inc. (NYSE:UPS), the world’s largest package delivery company reported financial results for the third quarter the exceeded the expectations of Wall Street analysts.
The stock price of the United Parcel Service, Inc. (NYSE:UPS) climbed more than 1% to $101.63 per share at the time of this writing, around 11:45 A.M. in New York on Friday.
UPS 3Q financial results
For the third quarter, United Parcel Service, Inc. (NYSE:UPS) generated earnings of $1.32 per diluted share, an increase of 13.8% from its earnings during the same period a year earlier. According to the company, its revenue increased 5.7% to $14.29 billion.
Wall Street analysts expected United Parcel Service, Inc. (NYSE:UPS) to post $1.28 in earnings per share and $14.2 billion in revenue based on data compiled by Thomson Reuters.
In a statement, UPS CEO David Abney said, “The solid performance we delivered this quarter establishes our ability to stay ahead of market growth and generate positive operating leverage. We continue making investments in technology and expanding our capabilities around the world to ensure we provide the long-term solutions customers demand.”
United Parcel Service, Inc. (NYSE;UPS) ended the quarter with $2.8 billion in free cash flow. During the period, the company paid $1.8 billion in dividends and repurchased 20.6 million shares worth around $2.1 billion.
UPS package delivery
United Parcel Service, Inc. (NYSE:UPS) reported that its daily packages in the United States increased 6.9% due to strong demand for B2C and B2B customers. Its international shipments rose 9.4% due to driven by growth in Asia and Europe. The company delivered 1.1 billion packages worldwide, up 6.9% in the third quarter.
United Parcel Service, Inc. (NYSE:UPS) said its revenue from domestic packaged increased 5.3% to $8.7 billion. Its revenue from international package rose 5.5% to $2.3 billion while its supply chain and freight revenue 7.4% to $2.4 billion. The company said its distribution revenue and UPS freight revenue increased 10% and 7.9% respectively.
For the upcoming holiday season, United Parcel Service, Inc. (NYSE:UPS) expected its shipments delivered to increase 11% on December. The company allocated additional $175 million in operating expense and $500 million in capital expenditures to improve its capabilities and prepare the network for peak and future volume.
The company maintained its full-year earnings expectations in the range of $4.90 to $5.00 per share.
UPS CFO Kurt Kuehn said, “It’s encouraging to see all three segments show positive momentum as we head into our busiest time of year. We expect another robust peak season and are confident our network is prepared to operate at the highest level.”
Commenting on UPS’ outlook, Citi Research analyst Christian Wetherbee said it “looks a bit soft” citing the reason that it was below the estimate of the research firm. According to him, the company’s expectation indicates, “while holiday volume will grow 11 percent, costs may be elevated.”