UPS Stock jumps on pace of second-quarter earnings, rising revenue per package

United Parcel Service (UPS) – Get the United Parcel Service Inc. report. posted a second better-than-expected profit on Tuesday and repeated its earnings forecast, thanks in part to a sharp rise in the price of domestic parcel revenue.

However, the stock came under pressure in early trading, after the parcel delivery group said domestic volumes would continue to fall in the first half of the year amid soaring fuel costs and transport, before improving in the six months ending in December.

UPS said earnings for the three months ending June were pegged at $3.25 per share, up 6.3% from the same period last year and well ahead of consensus forecasts. of Street of $3.15 per share. Group revenue, the company said, rose 5.9% to $24.8 billion, again beating estimates of $24.6 billion.

Domestic segment revenue rose 7.4% to $15.46 billion, UPS said, fueled in part by an 11.9% increase in revenue per piece, a key industry metric. International revenue increased 5.6% to $5.07 billion, while supply chain solutions sales were essentially flat at $4.24 billion.

Looking to the current calendar year, UPS reaffirmed its forecast for revenue of more than $102 billion and profit of about $14 billion.

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“I want to thank UPSers around the world for providing exceptional service to our customers,” said CEO Carol Tomé. “While the external environment is constantly changing, our better, not bigger strategic framework has fundamentally improved almost every aspect of our business, enabling greater agility and strong financial performance.”

UPS shares rose 1.9% in premarket trading immediately after the earnings release to point to an opening price of $191.50 each.

Late last month, UPS rival FedEx (FDX) – Get the FedEx Corporation report warned that profit margins at its workhorse ground transportation division would grow at a slower pace in the year ahead amid rising fuel and input costs.

FedEx posted better-than-expected profits for its fourth fiscal quarter, which ended in May, noting that it passed on higher fuel costs to customers, helping to improve margins at its mainstay. ground expedition unit. Group revenue, FedEx said, rose 8.1% from a year ago to $24.4 billion, narrowly beating analysts’ estimates of a total of $24.05 billion. .

Looking to the group’s next fiscal year, which ends in February 2023, FedEx said it expects earnings in the range of $22.45 to $24.45 per share, well ahead of forecasts for Refinitiv, adding that it plans to repurchase about $1.5 billion in stock over the past six years. months of the upcoming fiscal year.

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