UPS Profit Beats on Higher Delivery Prices
Delivery firms such as UPS and FedEx Corp. have banked on higher-paying small businesses and enterprise customers to drive volumes and earnings in the wake of falling e-commerce demand and receding domestic volumes.
After scrambling to add delivery capacity in the early days of the pandemic, delivery providers now have the high-stakes job of predicting demand in a rapidly changing market, as having too many planes in the air and delivery trucks on the road can lead to a spike in costs and sap profits.
UPS revenue per piece in its biggest and e-commerce-dependent U.S. domestic unit rose 9.8% for the quarter from a year earlier even as demand weakened, with average daily package volumes for the segment down 1.5% in the reported quarter.
Delivery firms such as UPS and FedEx Corp. have banked on higher-paying small businesses and enterprise customers to drive volumes and earnings in the wake of falling e-commerce demand and receding domestic volumes .After scrambling to add delivery capacity in the early days of the pandemic, delivery providers now have the high-stakes job of predicting demand in a rapidly changing market, as having too many planes in the air and delivery trucks on the road can lead to a spike in costs and sap profits.
“The macro environment is very dynamic, but we are on track to achieving our 2022 financial targets by executing our strategy and controlling what we can,” UPS Chief Executive Carol Tomé said.Atlanta based UPS’ shares were up about 1% in premarket trade as the company reaffirmed its full-year revenue forecast of about $102 billion and adjusted operating margin of around 13.7%.
Rival FedEx last month pulled its annual forecast, citing a sharp global slowdown at the end of August.
UPS revenue per piece in its biggest and e-commerce-dependent U.S. domestic unit rose 9.8% for the quarter from a year earlier even as demand weakened, with average daily package volumes for the segment down 1.5% in the reported quarter.The world’s largest parcel delivery firm’s quarterly revenue of $24.2 billion missed analysts’ estimates of $24.3 billion, as consolidated average daily package volumes declined 2.1% to 22.9 million in the quarter.
