An Impressive UPS Pickup

Editor's note: A previous version of this article incorrectly stated figures from UPS's quarterly release. We regret the error.

These days, people are watching United Parcel Service (NYSE:UPS) and fellow international delivery company FedEx (NYSE:FDX) for tangible signs that the U.S. economy is, or isn't, flagging. As such, solid results from either company are heartily welcomed. To have those results exceed expectations is an added plus. This was the case with UPS on Tuesday.

For the quarter, the Atlanta-based company recorded net income of $1.08 billion, or $1.02 per share, compared to $1.04 billion, or $0.96 a share a year ago. And if you back out the effects of a $46 million restructuring charge involving the company's supply chain operation in France, the per-share number in the latest quarter bobs up to $1.05 per share. The dart throwers who follow the company apparently had anticipated about $1.02 for the quarter. Third-quarter revenues were $12.2 billion, up from $11.7 billion last year.

It was a noteworthy quarter for the company, with revenues now approaching a run rate of $50 billion annually. And while I have no intention of inundating my Foolish friends with numbers, I think it's noteworthy that, year-to-date, UPS generated more than $5.2 billion in operating cash flow and $3.1 billion in free cash flow. It also paid $1.7 billion in dividends and spent $2 billion to buy back 27.9 billion of its shares. Finally, the company recently inked a major new contract with the Teamsters union.

A month ago, FedEx, a Motley Fool Stock Advisor selection, reported solid quarterly results and indicated that the outlook for its international business remains positive. Still, it delivered caution regarding its U.S. business.

FedEx's look ahead was little different from that of UPS. Indeed, as Scott Davis, UPS' CFO and soon-to-be CEO, said, "Fourth quarter results will be driven by good performance in our international operations and further gains in supply chain and freight. We expect slowing retail sales will restrain U.S. domestic volume growth."

In addition to these two companies, a varied array of large-cap companies have become cautionary regarding their U.S. business -- most notably giant equipment manufacturer Caterpillar (NYSE:CAT) and big aluminum producer Alcoa (NYSE:AA). In releasing their own results, both companies were far more optimistic about the near-term future of their international operations than about their domestic opportunities.

As to the prospects for UPS, it seems to me that the company is the essential international operator. Therefore, in the face of a domestic slowing, I remain confident that it will more than deliver to Foolish investors on its global balance.

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