UPS raises its forecast, citing overseas shipments and expectations for a strong holiday season
- UPS posted inline earnings and a revenue beat.
- The company said its results were impacted by the hurricanes that hit the southern part of the US in August and September.
- It raised its full-year forecast.
(Reuters) - United Parcel Service Inc reported a slightly lower quarterly net profit on Thursday due to hurricanes that hit the U.S. South in August and September, but lifted its full-year forecast, citing its international segment and expectations for the crucial holiday season.
The world's largest package delivery company met Wall Street forecasts. It said revenue at its core U.S. domestic package service rose 3.9 percent from a year ago to $9.65 billion, driven by deliveries of online purchases.
UPS said it took a $50-million hit from hurricanes across the United States in August and September.
"UPS produced another solid quarter of financial performance, despite the impact of several natural disasters that slowed regional economic activity and damaged infrastructure," CEO David Abney said in a statement.
The company said its international segment produced a record third-quarter operating profit of $627 million, up 8.9 percent, as a result of "broad, accelerated growth" in shipments.
The gains were helped by a strong international economy and UPS also took business from main rival FedEx Corp following a June cyber attack on FedEx's Dutch unit.
The Atlanta-based company posted third-quarter net income of $1.26 billion or $1.45 per share, compared with $1.27 billion or $1.44 per share a year earlier, according to Thomson Reuters I/B/E/S.
Analysts had expected earnings per share of $1.45.
The third quarter result "was impressive, particularly considering weather-related/natural disaster disruptions in the US during the quarter," said Baird analyst Benjamin Hartford.
Revenue per package in the domestic unit was up 2 percent versus the third quarter of 2016, reflecting higher prices and other factors.
Overall, quarterly revenue rose to $15.98 billion from $14.93 billion. Analysts expected revenue of $15.6 billion.
The company said it expects full-year earnings per share in a range from $5.85 to $6.10. Analysts expect $6.01 per share. (Reporting by Eric M. Johnson in Seattle; Editing by Chizu Nomiyama and Nick Zieminski)