When United Parcel Service Inc. (NYSE: UPS) reported third-quarter 2017 results before markets opened Thursday morning, the package delivery service posted diluted earnings per share (EPS) of $1.45 on revenues of $15.98 billion. In the same period a year ago, UPS reported EPS of $1.44 on revenue of $14.93 billion. Third-quarter results also compare to consensus estimates for EPS of $1.45 and $15.62 billion in revenue.
The company raised the low end of full-year EPS guidance by $0.05 to a new range of $5.85 to $6.10. Guidance includes about $0.30 a share in currency headwinds.
Operating profit for the quarter was flat year over year at $2.035 billion as average revenue per piece rose 2.7%, from $10.49 to $10.77. Domestic U.S. operating profit fell 5.6%. Total operating costs rose by $1.05 billion and net income dipped by 0.5% year over year.
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On Wednesday, UPS boosted its shipping rates by an average of 4.9% for UPS Ground, UPS Air and International services, as well as UPS Air Freight rates within and between the United States, Canada and Puerto Rico. The new rates take effect December 24, 2017.
Another offset to the company’s lukewarm third-quarter results came in an estimate published separately that UPS expects to deliver a record 750 million packages this holiday season. UPS noted that its sorting and delivery capacity is up by about 6% year over year and that it plans to hire 95,000 seasonal workers.
The company’s chief financial officer said:
UPS third-quarter results highlight the flexibility of our business. Our recent performance gives us confidence moving forward as we adapt to evolving, global ecommerce strategies with increased seasonality. We are executing well on our plans, have a positive outlook for peak and as a result, we are moving higher in our original guidance range.
Shares traded up about 1.1% early Thursday, at $119.90 in a 52-week range of $102.12 to $120.80. The 12-month consensus price target on the shares was around $116.71 before today’s report.
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