America’s addiction to online shopping was a boon for US package delivery and logistics company UPS during the first quarter.
The company saw revenue climb 6.2 per cent to$15.31bn during the first three months of the year, compared to the prior year period, as it shipped and delivered ever more packages and raised some of its prices to customers to offset higher fuel costs.
Net income came in at $1.15bn, or $1.32 a share. Both sales and profits handily beat Wall Street estimates, which had forecast net income of $1.12bn, or $1.28 a share on revenue of $15.18bn.
“Revenue came in strong this quarter with all segments adding to the topline,” said David Abney, UPS chairman and CEO. “We are accelerating investments to create the industry’s leading smart global logistics network and value-creating portfolio. UPS customers are benefiting from expanded capacity, choice and improved time-in-transit, while technology solutions continue to deliver efficiencies.”
The US business – by far UPS’s largest – reported a 5 per cent jump in revenue to $9.53bn during the quarter as e-commerce related deliveries surged. Average daily package volume in the US was up 2.6 per cent while average revenue per package rose by a similar margin after UPS raised rates late last year, adding among other things higher surcharges for large packages.
UPS’s international business also turned in a strong quarter, with revenue up 5 per cent to $3.05bn amid increased demand for cross-border shipments. Its supply chain and freight delivery unit saw sales rise to $2.72bn, from the $2.42bn reported in the prior year period.
The company reiterated its guidance for the 2017. It expects adjusted diluted earnings per share to be between $5.80 and $6.10.