UPS sales top $13.4B, profits up in Q1

Bloomberg News
April 25, 2013

United Parcel Service, the world’s largest package-delivery company, posted higher first- quarter earnings than analysts estimated as deliveries of online purchases increased.

Adjusted profit of $1.04 a share topped the average $1.01 estimated by analysts, and the Atlanta-based company reiterated its full-year forecast of $4.80 to $5.06. Analysts had projected $4.99 for the year, the average of 30 estimates in a Bloomberg survey.

UPS is benefiting from a 4.4 percent increase in domestic deliveries driven by goods as varied as auto parts, health-care products and clothing, which helped push sales up 2.3 percent to $13.4 billion. The company handles more than 16 million packages and envelopes a day, making it a bellwether for the economy.

“January started strong, benefiting from the post-holiday season,” Chief Financial Officer Kurt Kuehn said in the statement. “The pace of growth for the remainder of the quarter was in line with our expectations.”

In January, UPS dropped its bid to buy TNT Express NV for $6.7 billion when European regulators moved to block the deal. UPS paid TNT a 200 million-euro breakup fee in the first quarter.

Including an after-tax benefit from a currency gain, net income rose 6.9 percent to $1.04 billion, or $1.08 a share, from $970 million, or $1.

Demand in January benefited from customers returning holiday purchases through the UPS Returns service, UPS said. The company also introduced Access Point locations in the United Kingdom to give customers alternatives to receiving deliveries at home.

UPS slid 0.3 percent to $83.50 yesterday in New York trading. The shares have risen 5.1 percent in the past year before today, compared with a 6.2 percent gain for FedEx Corp. and 15 percent for the Standard & Poor’s 500 Index.

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