UPS Posts Bigger Quarterly Profit, Sees Strong Holiday Volumes

Earns UPS (In this Monday, Oct. 22, 2012, photo, a UPS driver drives after a delivery in North Andover, Mass. In this Monday, Oc
Elise Amendola/AP
By Nivedita Bhattacharjee

CHICAGO -- United Parcel Service Inc said increased demand in domestic ground shipments lifted profits in the third quarter and expects online sales to boost shipping volumes as it heads into the holiday quarter.

Shares in the courier company rose 2 percent Friday before the markets opened.

UPS (UPS), which delivered more than 1 billion packages worldwide during the quarter, also reconfirmed its profit view for the year.

Shipment volume and forecasts at UPS, along with rival FedEx (FDX), are closely watched by Wall Street and considered an indication of overall economic health because of the vast amount of goods they transport.

For this year's holiday season, UPS said it expects peak season daily volume to increase by 8 percent, with pick-up volumes for Cyber Monday increasing 10 percent. Earlier in the week, rival FedEx forecast an 11 percent rise for the same day, the Monday after Thanksgiving that is traditionally a big day for online holiday sales.

For the third quarter, UPS said daily ground shipping volumes rose 3 percent, while next-day shipping fell 3.3 percent.
Clients have been trading down from pricey next-day air deliveries to more affordable shipping ways that take more time, to save money.

Also, manufacturers and retailers have become more savvy with their supply chains, planning shipments strategically to cut back on express shipping. This reduces costs for manufacturers, but hurts courier companies like UPS, which make more money on faster shipping.

UPS said some shippers have moved their distribution facilities closer to their customers, which slowed air shipment growth but led to a greater use of UPS Ground facilities.

For the third quarter, the Atlanta-based company earned $1.10 billion, or $1.16 a share, compared with $469 million or 48 cents a share a year earlier. The company expects earnings of between $4.65 and $4.85 a share for the current year.

Revenue came in at $13.52 billion, up 3.4 percent over last year, mainly helped by U.S. e-commerce shipments and strong European export growth.

Analysts, on average, were expecting the company to earn $1.15 a share, on revenue of $13.6 billion, according to Thomson Reuters I/B/E/S.

Shares of the company were trading at $96.54 Friday morning before the bell. They closed at $94.49 Thursday on the New York Stock Exchange.


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evans.mom

MAYBE MY SON EVAN CAN FINALLY GET A JOB AT UPS, AND MOVE OUT OF MY BASEMENT. HE WOULD HAVE TO QUIT HIS IMAGINARY JOB AT ARAMARK FIXING VENDING MACHINES THOUGH.

October 25 2013 at 1:33 PM Report abuse +1 rate up rate down Reply
1 reply to evans.mom's comment
evans.mom

THEN HE CAN MAKE HIS OWN HOT POCKETS

October 25 2013 at 1:34 PM Report abuse +1 rate up rate down Reply
Melanie

It is my understanding that UPS has a lot of claims due to packages being damaged in transit and lost packages. Doesn't matter how well the item was packaged because the handlers seem to get thier jollies by mishandling them especially those marked FRAGILE. Their profits may be up but if the package sent doesn't get to its destination in one piece or at all, what good is it?

October 25 2013 at 10:54 AM Report abuse +1 rate up rate down Reply
jrb359

Between the two biggest carriers, UPS gives MORE to their employees than Fed Ex. You might want to think about than when you have a choice as to who will bring you your merchandise! I should know, I worked for Fed Ex for three years.

October 25 2013 at 10:12 AM Report abuse -2 rate up rate down Reply
Neville

We'll see how that works out for you after the holidays!

October 25 2013 at 9:23 AM Report abuse +1 rate up rate down Reply