United Parcel Service
reported third-quarter net income fell 43%, but the company beat estimates and said it sees an improving economy.
The company said it earned $549 million, or 55 cents a share. Analysts surveyed by Thomson Reuters had estimated 52 cents. Revenue declined 15% to $11.2 billion, in line with estimates. In the same period a year earlier, UPS earned $970 million, or 96 cents a share.
The company said a stabilizing economic environment led to improving volume trends during the quarter, while its international business continued to increase market share. Earnings of 55 cents a share were at the high end of the company's guidance range of 45 cents to 55 cents.
"I'm encouraged by the signs of economic recovery that are becoming apparent, although we still have a long way to go," said CEO Scott Davis, in a prepared statement.
Looking ahead to Christmas, UPS said forecasters predict U.S. consumers will spend conservatively. "Our customers have widely differing views on their outlook for the holiday season," said Chief Financial Offcier Kurt Kuehn. "Continuing our earnings momentum from the third quarter, we expect earnings per diluted share within a range of 58 cents to 65 cents for the fourth quarter." Analysts had been estimating 63 cents.
The company reported average daily volume of 14.3 million packages, down 3.9% from 14.9 million during the same period a year earlier. Revenue per piece declined by 11.3%. Operating margin declined to 8.3% from 12.4%.While domestic daily volume fell by 5.1%, international daily volume rose by 4%.
UPS ended the quarter with $2.8 billion in cash and short-term investments. During the quarter, the company repurchased 7.8 million shares at a cost of $396 million.
-- Written by Ted Reed in Charlotte, N.C.