United Parcel Service (UBS) – Obtain a United Parcel Service Inc. report. It posted a second, better-than-expected profit on Tuesday, and it reiterated its earnings guidance, thanks in part to a big jump in domestic parcel yield prices.
The stock came under pressure in early trading, after the package delivery group said domestic volumes would continue to decline during the first half of the year, amid rising fuel and transportation costs, before improving to the six months ending in December.
UPS said earnings for the three months ending in June were flat at $3.25 per share, up 6.3% from the same period last year and solidly above street expectations of $3.15 per share. The company said group revenue rose 5.9% to $24.8 billion, again exceeding estimates of $24.6 billion.
UPS said domestic segment revenue rose 7.4% to $15.46 billion, boosted in the gig by an 11.9% increase in revenue per segment, a key industry metric. International revenue increased 5.6% to $5.07 billion, while sales of supply chain solutions primarily stood at $4.24 billion.
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Looking at the current calendar year, UPS has reaffirmed its guidance for revenue of more than $102 billion and profits in the region of $14 billion.
“I would like to thank UPSers around the world for providing outstanding service to our customers,” said CEO Carol Tomei. “While the external environment is constantly changing, our better rather than the largest strategic framework has fundamentally improved nearly every aspect of our business, allowing for greater resilience and strong financial performance.”
UPS shares posted a 1% drop in pre-market trading immediately after the earnings were released to indicate an opening bell price of $186.00 per share.
Late last month, UPS competition for FedEx (FDX) – Get a FedEx Corporation report He warned that profit margins in the backbone’s road transportation division will expand at a slower rate over the next year amid rising fuel and input costs.
FedEx reported better-than-expected earnings for the fiscal fourth quarter, which ended in May, noting that it passed on increased fuel costs to customers allowing margins for a key ground freight unit to improve. FedEx said group revenue rose 8.1% from a year ago to $24.4 billion, narrowly beating analyst estimates of $24.05 billion.
Looking at the group’s upcoming fiscal year, which ends in February 2023, FedEx said it expects earnings in the region of $22.45 to $24.45 per share, well ahead of Refinitiv’s forecast, adding that it expects to buy back about $1.5 billion of shares over the last six. months of the next fiscal year.