By Eric M. Johnson and Nick Carey
SEATTLE/DETROIT (Reuters) – United Parcel Service Inc on Thursday reported a higher-than-expected quarterly net profit, citing a jump in ecommerce deliveries in its U.S. domestic package service, and confirmed its forecast for 2017.
The world’s largest package delivery company said revenue at its core U.S. domestic package service rose 8 percent to $9.7 billion. Revenue per package in the domestic unit was up 3 percent versus the second quarter of 2016, reflecting the fact that they raised prices.
Like its main rival FedEx Corp, UPS has experienced a boom in ecommerce packages over the last decade. But the boom has come at a price, as both companies have had to invest heavily in their networks.
The Atlanta-based company posted second-quarter net income of $1.4 billion or $1.58 per share, up nearly 8 percent from $1.3 billion or $1.43 per share a year earlier. Analysts had expected earnings per share of $1.47, according to Thomson Reuters I/B/E/S.
UPS said higher fuel surcharges and workers’ compensation contributed 10 cents per share to earnings in the quarter.
UPS CEO David Abney told analysts the company expects moderate global economic growth this year and praised a free trade pact reached in early July between Japan and the European Union.
The EU-Japan agreement, which creates the world’s biggest open economic area, signals resistance to what they see as U.S. President Donald Trump’s protectionist turn.
Trump formally withdrew the United States from TPP after taking office. UPS was a strong proponent of the Trans-Pacific Partnership deal.
The company expects full-year earnings per share in a range from $5.80 to $6.10. Analysts expect earnings per share for the year of $5.95.
UPS shares dipped 0.7 percent to $111.49 in premarket trading.
The company said revenue in its international segment was up 2.8 percent but operating profit fell nearly 5 percent, hurt by the strong U.S. dollar. Revenue in the supply chain and freight segment was…