UPS Beats Expectations in Second Quarter

United Parcel Services (UPS) reported second-quarter results that came in better than Wall Street expected as gains in the domestic segment offset a weaker performance in the international division amid demand for next-day delivery that was driven by online shopping.

Adjusted earnings rose to $1.96 a share from $1.94 a share in the same period of 2018, while the consensus on Capital IQ was for $1.93 a share. Revenue climbed to $18.05 billion from $17.5 billion in the year-earlier period, while the Street was looking for $17.98 billion.

“Our transformation initiatives are generating greater efficiencies across the network and, when combined with our growth strategies, UPS achieved profit growth in all segments,” said Chief Executive David Abney.

Shares in the Atlanta-based company jumped 8.3% in early trading.

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The US domestic segment saw revenue increase to $11.15 billion from $10.35 billion a year earlier, with “significant volume growth in all products,” UPS said. That was led by a 30% increase in volumes for the UPS Next Day Air service amid growing delivery demands from e-commerce shippers.

“Demand for faster delivery is a structural change in our industry,” Abney said. “Our additional air capacity and modernized network enabled this growth to have a positive impact on profitability and positions UPS well to serve the growing needs of the market.”

International segment revenue slowed to $3.5 billion from $3.6 billion “due to global macroeconomic pressure and tough year-over-year comparisons,” the company said. Revenue in the supply chain and freight division fell to $3.39 billion from $3.5 billion previously.