Shares of United Parcel Service Inc climbed toward a three-month high in early Thursday trading, after the package delivery giant beat third-quarter beat revenue expectations for the first time in two years, amid strength in the U.S. business.
While the company trimmed its full-year revenue outlook, it was only to account for the completed sale of its Coyote Logistics business.
“After a challenging 18-month period, our company returned to revenue and profit growth,” said Chief Executive Carol Tomé. “Peak season is nearly upon us, and we are ready to deliver another successful holiday season and continue the progress we demonstrated in the third quarter.”
The stock up 7% in premarket trading on Thursday, to put it on track to open at the highest price seen since July 22. The stock was also headed for the biggest one-day post-earnings gain since it soared 14.1% on Feb. 1, 2022.
Net income rose to $1.54 billion, or $1.80 a share, from $1.13 billion, or $1.31 a share, in the same period a year ago.
Excluding nonrecurring items, adjusted earnings per share of $1.76 beat the FactSet consensus of $1.63.
Revenue grew 5.6% to $22.25 billion, above the FactSet consensus of $22.10 billion, to snap an eight-quarter streak of misses.
For UPS’s largest business segment, U.S. domestic package revenue climbed 5.8% to $14.45 billion, to beat expectations of $14.27 billion.
Average daily volume increased 6.5% to 18.4 million pieces, as ground deliveries rose 8.9% to offset a 4.9% decline for Next Day Air deliveries and a 8.3% drop in deferred deliveries.
International package revenue was up 3.4% to $4.41 billion, just above the FactSet consensus of $4.40 billion, as volume eased 0.6% but revenue per piece grew 2.5% to $20.78.
And supply chain solutions revenue increased 8% to $3.38 billion, just shy of the FactSet consensus of $3.39 billion,
Looking ahead, the company trimmed its outlook for revenue to $91.1 billion from $93 billion, as the previous guidance included revenue from the Coyote Logistics business. The sale of Coyote Logistics was completed during the third quarter.
The stock has dropped 16.4% year to date through Wednesday, while the Dow Jones Transportation Average has edged up 1.2% and the S&P 500 index has advanced 21.5%.
