The Atlanta-based package delivery service reported adjusted earnings of $1.82 a share, which was in line with expectations. However, revenue of $17.44 billion missed analysts' forecasts calling for $17.49 billion, according to FactSet.
The U.S. domestic segment saw revenue growth of 8.1% to $10.4 billion, while the company's international segment reported a revenue increase of about 5% on a currency-neutral basis to $3.48 billion, which fell short of expectations of $3.66 billion. Revenue for the supply chain and freight segment increased more than 12% to $3.5 billion.
"Supply Chain and Freight performance was outstanding this quarter, as the unit delivered double-digit growth in both revenue and adjusted operating profit," UPS Chairman and CEO David Abney said in a statement. "UPS will continue to leverage our vast forwarding, customs, and supply-chain solutions to help customers expand their existing businesses and reach new markets."
For the full year, UPS said it expects adjusted earnings in a range of $7.03 to $7.37 a share. UPS further anticipates fourth-quarter adjusted earnings "to increase about 15%, despite anticipated currency headwinds in emerging markets and one less operating day during peak season."
Shares of UPS fell 5.5% to $107.93. The stock has declined by about 9% year to date.
UPS in September outlined its transformation plan, which is expected to result in $1 billion of cost savings and increase adjusted earnings per share in the range of $1 to $1.20 by 2022.
UPS detailed its four strategic imperatives: Expansion of high-growth international markets, growing business-to-business and business-to-consumer e-commerce, further penetration of the healthcare and life sciences logistics market, and enhancing services for small- and medium-sized businesses. The plan also includes more than 70 expansion projects for package facilities and the opening of seven new "super hub" automated sortation facilities that will be a 30% to 35% increase in efficiency than comparable less-automated facilities.
And as the company prepares for the holiday season, it plans to bring on 100,000 workers in order to meet demand. Last year, the company said that shipments surged beyond network capacity during the holiday season, costing it about $125 million.
"We will put on more capacity this year than we ever have put on before," Chief Strategy and Transformation Officer Scott Price told TheStreet in September. "That capacity will help us in some of the geo areas where there was a disproportionate growth."