UPS (UPS) earnings rose sharply in the second quarter to easily beat Wall Street's forecast on better-than-expected revenue growth, the world's largest package delivery company said Thursday. UPS also raised its full-year profit outlook. Like rival FedEx (FDX), UPS is considered to be a bellwether of global economic activity.
"UPS fired on all cylinders in the second quarter even in the face of a mixed global economic environment," CEO Scott Davis said in a statement. "Our U.S. domestic reorganization is producing better than expected results. Substantial growth in our international segment continues to outpace the market."
For the three months ended June 30, UPS reported net income of $845 million, or 84 cents a share, versus $445 million, or 44 cents, recorded in last year's second quarter. Analysts, on average, expected UPS to report earnings of 77 cents a share, according to data from Thomson Reuters.
Revenue rose 13% to $12.2 billion from $10.8 billion in the prior-year period, and ahead of Wall Street's view for revenue of $11.98 billion. U.S. domestic package delivery, UPS's largest business, saw revenue rise more than 7% in the quarter, while international package delivery jumped more than 23%.
"We experienced strong revenue growth across the board, with substantial margin expansion in our U.S. and International segments," said Chief Financial Officer Kurt Kuehn in a statement.
Stronger results, including higher volumes and margin expansion, led UPS to raise its full-year earnings forecast to a range of $3.35 to $3.45 a share, well ahead of analysts' average view of $3.27 a share. UPS's stock rallied sharply on the news. For the year to date, UPS is outperforming the broader market by about 8 percentage points. (See chart below.)
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