UPS profit jumps despite lower fuel surcharges

Shipping giant UPS posted 10.2% growth in first-quarter profit, though revenue grew at a slower rate as the company took in less money from fuel surcharges.

UPS net income rose to $1.1 billion, matching S&P Global Market Intelligence expectations. Operating profit rose 9% to $1.8 billion, compared to the same period a year earlier.

Earnings per share of $1.27 outpaced S&P Global Market Intelligence expectations of $1.21.

Revenue increased 3.2% to $14.4 billion, tracking expectations of $14.6 billion.

“We continue to execute well in all areas of our long-term enterprise strategy,” UPS CEO David Abney said in a statement. “The combination of revenue growth and benefits from our accelerated investments generated strong financial results in the quarter.”

UPS shares (UPS) rose 0.6% to $107.15 in pre-market trading Thursday.

Still, plummeting oil prices translated into lower fuel surcharges, leading to 1.5 percentage points of less revenue. Currency rates also took a toll.

But UPS said that network improvements bolstered the bottom line in the first quarter.

In the U.S., the volume of daily packages rose 2.8%, though revenue-per-package slipped 1.3%. Domestic package profit was $1.1 billion, up 7.6% from a year earlier, while revenue was $9.1 billion, up 3.1%.

International package revenue fell 1.9% to $2.9 billion, though international package operating profit rose 15.3% to $574 million.

UPS also reaffirmed its outlook of diluted earnings per share growth of 5% to 9% for 2016.

Follow Paste BN reporter Nathan Bomey on Twitter @NathanBomey.