said first quarter earnings climbed 37%, exceeding analyst expectations after the company had projected a challenging quarter.
The largest overnight package carrier pre-announced its results following the market's close on Wednesday. It said adjusted first-quarter earnings were 71 cents. Analysts surveyed by Thomson Reuters were estimating 58 cents. Consolidated revenue grew 7%. Analysts were estimating 6%. In the same quarter a year earlier, adjusted earnings were 52 cents a share.
On a reported basis, UPS said, earnings were 53 cents a share compared with 40 cents in the same quarter a year earlier.
The company also increased its expectations for full-year adjusted earnings. The outlook now is for 2010 earnings in a range between $3.05 and $3.30 a share, up from the range of $2.70 to $3.05 a share that UPS provided in February. Analysts were estimating a 28% increase to $2.95.
"We expected the first quarter to be the most challenging of 2010 as the economic recovery gathered steam through the year," said CFO Kurt Kuehn in a prepared statement. "As it turned out, revenue was stronger than we expected due to international volume gains, increased yields in the U.S. and growth in forwarding and logistics. Also, the operating leverage in our streamlined network provided higher margins than anticipated."
UPS stock closed Wednesday at $65.45, up 57 cents or nearly 1%. In aftermarket trading Wednesday evening, shares were trading at $68.05.
During the quarter, revenue increased 18% in international packages and 14% in supply chain and freight. U.S. domestic daily volume grew less than 1%, but it was the first year-over-year growth in more than two years. Results included one-time charges that reduced net income by $175 million or 18 cents a share. Included was a $98 million pre-tax charge related to reorganization of the U.S. package segment and a $76 million non-cash charge to income tax expense, related to the status of a German subsidiary.
UPS will report earnings on April 27.
-- Written by Ted Reed in Charlotte, N.C.