Package deliverer United Parcel Service Inc has posted a profit that that was higher than expected, despite having its revenue weighed down by a strong dollar and reiterated its earnings outlooks for the full year.
Executives at UPS said that volumes of packages during the upcoming key holiday shopping season from Thanksgiving to New Year’s should increase by 10%.
UPS said it anticipates that December 22 will be its peak day and is projecting it will ship over 36 million packages or close to double its normal daily average.
After two straight years of disappointing results for the fourth quarter, UPS is now under pressure to deliver during this Christmas and holiday period.
David Abney the CEO told analysts thanks to the additional capacity in the network and the selective increases in prices to provide an excellent service at a cost that is appropriate.
The largest package delivery business in the world is often looked at as a barometer for the economic health of the U.S.
The CEO said UPS has seen softness in the U.S. economy and the U.S. dollar’s strength would continue impacting on exports as would the soft demand globally.
UPS announced that without U.S. currency impact on its quarterly results, revenue in the quarter would have increased. UPS said as well that lower surcharges on fuel revenue weighed on its results as well.
UPS reported net profit for the third quarter of just over $1.26 billion equal to $1.39 a share, which was 4% higher than the $1.21 billion equal to $1.32 a share from the same period one year ago.
Analysts expected per share earnings to be $1.37. UPS said that it is expecting per share earnings for the full year to be at the high end of its forecast previously announced of between $5.05 and $5.30.
Revenue during the quarter was $14.24 billion, which was down slightly from last year’s $14.29 billion. Analysts expected revenue to reach $14.43 billion.