United Parcel Service (UPS) reported an 80% jump in third-quarter net income on higher revenue and margins. The world's largest package delivery company easily exceeded Wall Street estimates and raised its full-year earnings outlook.

UPS said third-quarter profit rose to $991 million, or 99 cents a share, from $549 million, or 55 cents, a year ago. On an adjusted basis, UPS earnings came to 93 cents a share, which beat analysts' average estimate by a nickel, according to data from Thomson Reuters.

Revenue for the three months ended Sept. 30 increased 9% to $12.19 billion from $11.15 billion in last year's third quarter. The top-line number was shy of analysts' forecast for revenue of $12.37 billion. U.S. domestic package revenue gained 6%, while the international business grew 11%. The company's supply chain and freight division enjoyed a 19% jump in revenue.

Average daily volume increased 5%, while adjusted operating margin expanded more than 4% After undergoing a painful domestic reorganization, UPS has been benefiting from margin-boosting cost efficiencies.

"UPS generated superior performance across all segments," Kurt Kuehn, UPS's chief financial officer, said in a statement. "Based on the projections of retailers and economists, we expect modest growth during the holiday peak season. We are raising our full-year 2010 guidance with adjusted earnings per share expected to grow more than 50% over last year."

With its largest investment spending behind it, UPS should harvest cash flow and reward investors, said Sterne Agee analyst Jeff Kauffman in a note to clients ahead of the report. "The combination of reduced capital requirements, increasing margins and a more flexible attitude about balance sheet management should result in increased dividends, share repurchases and acquisitions to augment share price," the analyst wrote.

Like chief rival FedEx (FDX), UPS's results tend to get a lot of attention because its global footprint offers insights into the health of the world economy. Last month FedEx said it's fiscal first-quarter profit more than doubled on an 18% gain in revenue.

Shares in UPS are up 20% for the year-to-date, outperforming the broader market by a wide margin.


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finfan063

to gguevy they will be here long after you are gone can you say 100 years everyone has to have something to complain about send it snail mail and we will see you in the bread line have a nice trip

October 22 2010 at 12:21 AM Report abuse rate up rate down Reply
gquevy

A own a retail store. UPS drives their employees like dogs now. Delivery people have no time to be careful handling boxes. Forget buying FRAGILE stickers because it is a waste of money. I have witnessed drivers throwing boxes from three feet to the ground. Ups still charges a fuel fee imposed when oil was over $100. a barrel. UPS has refused damage claims three times this year and will not return the fee they charge us for the insurance. Unless the box appears to have been run over by the truck, forget getting the damages paid. UPS also charges us for the return of the damaged items. UPS now charges $4 a day for the delivery man to stick his head in the door, interrupting sales conversations with clients to ask if we have anything for them. I have had a daily service with UPS for years. It went from a reliable courteous employee business to another rip off big corporation. Do you suppose the above has anything to do with UPS 80% increase in quarterly profits??? Beginning in January they are fired and being replaced by the US postal service who also do pick-ups and who very much appreciate the business. If you own UPS stocks, sell them. This company has no future treating their old loyal customers the way they do now. Enjoy your 99 cents share profit! Your next on the UPS greed list.

October 21 2010 at 8:09 PM Report abuse rate up rate down Reply
jforgit9

If their earnings were down....even by 1%, someone in the first 2 posts would blame Obama.

October 21 2010 at 4:38 PM Report abuse rate up rate down Reply
sharpqueen

So why doesn't this stock SPLIT - ? ? ? ?

October 21 2010 at 1:40 PM Report abuse rate up rate down Reply