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UPS Gets Boost From E-commerce, Sees "Robust" Online Sales Ahead

UPS (NYSE: UPS  )  reported third-quarter earnings results today that included a 9.4% jump in profit. Diluted earnings per share rose to $1.16, and revenue ticked higher by 3.4%, driven by a solid uptick in e-commerce sales in the United States.

Worldwide, the delivery giant handled more than 1 billion packages throughout the third quarter, representing a 4.6% increase over last year's tally. In the U.S., daily package volume was 2.3% higher than the same period last year, driven by e-commerce shipments.

The company saw its international revenue per shipment fall 5.4% as shippers continue to migrate toward slower delivery options that represent a lower margin business for UPS. Still, it expects solid e-commerce sales in the U.S. to continue boosting its overall business. Company CFO Kurt Kuehn said of the upcoming holiday season, "although some major retailers have expressed caution about holiday spending, they still expect robust online sales."

UPS also faces operational challenges around the compressed holiday calendar this year due to the fact that there are six fewer shopping days between Thanksgiving and Christmas than in 2012. Still, Kuehn said that management is "confident in UPS's ability to successfully deliver the holidays." The company affirmed its full-year guidance of adjusted diluted earnings of between $4.65 and $4.85 per share, an improvement of 3% to 7% over last year.

UPS also delivered more than $4 billion to shareholders in the third quarter. It paid dividends of $1.7 billion, and spent $2.9 billion in repurchasing 33 million of its own shares.

UPS also said today it will be hiring 55,000 U.S. seasonal workers to help with an increase in volume over the holiday season. The world's biggest package delivery company said it foresees peak season daily volume rising 8%this year.

-- Material from The Associated Press was used in this report.


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