United Parcel Service (NYSE: UPS) reported a rise in earnings and revenue for the second quarter ended June 30, 2019. The results also exceeded analysts’ expectations sending UPS stock in the upward direction. UPS adjusted earnings were $1.96 per share on revenue of $18.05 billion. Wall Street had expected the freight firm to earn $1.92 per share on revenue of $17.97 billion. Shares of UPS rose about 3% in the pre-market trading session.
The Atlanta, Georgia-based logistics firm’s second-quarter results were benefitted by the rising demand for next-day service in the US and cost management actions in the International and Supply Chain and Freight segments. Unadjusted earnings were $1.69 billion or $1.94 per share compared to $1.49 billion or $1.71 per share in the prior-year quarter.
Revenue growth of 3.4% was driven by gains in average daily volume in the U.S. and higher-quality, currency-neutral revenue in the International segment.
The U.S. Domestic segment generated significant volume growth in all products, led by a more than 30% surge in UPS Next Day Air volume. The sharp increase in demand for the company’s next-day services was driven by accelerated delivery requirements from e-commerce shippers.
The International segment generated its best second-quarter profit in the company’s history and expanded adjusted operating margins while navigating areas of trade uncertainty.
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Successful cost management enabled by the company’s asset-light strategies delivered strong financial results for the Supply Chain and Freight segment, while the segment’s revenue was pressured by softer trade.
For full-year 2019, UPS reaffirmed its previously stated adjusted EPS guidance of $7.45 to $ 7.75. Third-quarter adjusted EPS is expected to benefit from numerous items including one additional operating day and year-over-year International benefits from 2018 commodities headwinds that should not repeat.
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“Our Transformation initiatives are generating greater efficiencies across the network and, when combined with our growth strategies, UPS achieved profit growth in all segments,” said CEO David Abney.
Last month, the shipping giant’s peer FedEx Corporation (NYSE: FDX) reported its fourth-quarter results and the company slipped to a loss in the quarter. While the bottom line exceeded analysts’ expectations, the top line missed consensus estimates.
UPS shares rose 8% since the beginning of the year and have dropped 7% from the year-earlier level.