UPS Boosts Quarterly Profit
United Parcel Service, boosted by growth in both its international and domestic U.S. package markets, reported today a 22-percent rise in quarterly profits, beating Wall Street expectations.
Atlanta-based UPS, the world’s largest package delivery company, earned $702 million, or 60 cents per share, in this year’s third quarter, compared with a profit of $577 million, or 52 cents, in the same period last year.
Analysts on average had expected UPS to earn 58 cents in the third quarter, according to First Call/Thomson Financial, which tracks such forecasts.
UPS’ global volumes, a key measure of financial health in the package delivery industry, averaged 13.5 million pieces a day in the quarter, up 6.2 percent from the same period last year.
UPS averaged volumes of about 1.1 million pieces a day for its entire international service, a 14.9-percent gain from last year. Volumes for the company’s U.S. domestic package business averaged 12.3 million pieces a day, a 5.4-percent rise over the year earlier period.
“I think it was an exceptionally solid quarter,” said Edward Wolfe, analyst with U.S. brokerage Bear Stearns, who noted that UPS’ international and domestic ground volumes were particularly strong in the third quarter.
Wolfe, who has a rating of attractive with a 12-month price target of $64 a share on UPS, said the stock would likely see some buying if U.S. stock markets had a “normal” trading session.
UPS, which has traded at a high of $76-10/16 and a low of $49-8/16 during the past year, closed at $53-1/16 on Wednesday on the New York Stock Exchange.
The package deliverer also said today it was confident it would enjoy a solid fourth quarter, which includes the busy holiday season. Holiday volume is expected to produce a one-day peak exceeding 19 million deliveries, it said.
“We are successfully executing our strategy and growing every segment of our business,” UPS Chairman and Chief Executive Officer Jim Kelly said in a statement accompanying the earnings results.
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Sears Beats the Street
Retail giant Sears Roebuck reported today an 18 percent increase in third-quarter income that beat Wall Street forecasts, as fewer outstanding shares and a good performance from its credit operations boosted results.
Sears, the No. 2 retailer behind Wal-Mart Stores Inc., reported net income in the third quarter rose to $278 million, or 81 cents a diluted share, compared with $236 million, or 62 cents, in the same quarter a year ago.
Third-quarter 1999 earnings included a non-comparable charge of $29 million, or 7 cents per share, for staff reductions and the exit from certain automotive retail markets.
On average, analysts polled by First Call/Thomson Financial had expected the retailer to report a profit of 80 cents a share.
Sears repurchased 6.4 million shares during the quarter.
Total revenues in the quarter climbed to $9.63 billion from $9.20 billion a year ago. The revenue increase was primarily due to improvements in Sears department stores and Sears Canada. Domestic comparable store sales increased 3.5 percent.