UPS beats quarterly expectations, raises full-year guidance again

United Parcel Service on Tuesday reported third-quarter results that beat Wall Street expectations and raised its full-year guidance.

The guidance raise comes after the company already upped its outlook last quarter. UPS now said it’s projecting full-year consolidated revenue of approximately $92.6 billion, up from its previous expectations of $91.2 billion, as well as fourth-quarter revenue of $25.7 billion.

Shares of UPS rose slightly in premarket trading.

Here’s how the company performed in its third quarter, compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

• Earnings per share: $1.69 adjusted vs. $1.63 expected
• Revenue: $22.9 billion vs. $22.29 billion expected

For the quarter ended Sept. 30, UPS reported net income of $1.16 billion, or $1.37 per share, down slightly from net income of $1.31 billion, or $1.55, the year prior. Adjusting for one-time expenses, UPS reported earnings per share of $1.69. Revenue rose 6.7% to $22.9 billion.

In its domestic segment, the company said it saw a 4.5% increase in revenue, while its international segment had a 7.1% rise in revenue. Its supply chain solutions business saw an 18.2% revenue increase, which UPS said was primarily driven to growth in forwarding and logistics, including healthcare. On a call with analysts, CEO Carol Tomé said healthcare revenue exceeded $3 billion for the third consecutive quarter.

The company had previously said it expected its third-quarter domestic revenue to be flat and for domestic average daily volume to fall due to seasonal declines and the glide down with Amazon.

“We’re driving more premium growth, improving revenue quality and mix, and creating greater operating leverage through a more efficient network,” Tomé said on the call. “All of this is strengthening the underlying performance of our business.”

UPS has been in the midst of a turnaround under Tomé’s leadership, working to create a leaner business model and leveraging automation to position the company for growth.

As the company prepares for its peak holiday season, Tomé said the consumer remains resilient, and the growth in average daily volume between the third and fourth quarters will be consistent with last year. However, fourth-quarter domestic average daily volume is expected to fall due to the reduction with Amazon.

She added that nearly 70% of all packages will flow through an automated process this holiday season.