The world’s largest package delivery company grew its quarterly profit despite a decline in revenue. It sees holiday shipments rising 10 percent. Fred Katayama reports.
UPS revenue dips on strong dollar
UPS delivered mixed results. The world’s largest package delivery company grew its quarterly profit thanks to a strong performance in its international business. But it surprised Wall Street with a slight decline in revenue. The culprits: the strong dollar and lower fuel surcharges. UPS says its revenue would’ve risen were it not for the mighty dollar. And its fuel surcharge revenue fell faster than its fuel costs.
Demand for its services grew in the U.S. It said more customers chose to upgrade their shipping to air delivery. It also saw strong demand in Europe for cross border shipments.
But UPS, a bellwether for the economy, faces a labor challenge in the U.S. just as it enters the critical holiday shopping season. Its pilots have authorized their union leaders to call a strike if necessary.
UPS voiced optimism, saying it’s confident it can hit the higher end of its previously announced profit forecast for the full year. It predicts it’ll make 10 percent more deliveries during this holiday season than last year, when it overestimated demand.
UPS shares fell in early trading, adding to their 4 percent loss this year.