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UPS Reports Jump in Earnings

The company cites strong sales in its international and nonpackage businesses.

United Parcel Service

(UPS) - Get Report

posted a jump in first-quarter profit, led by strong sales in its international and nonpackage businesses.

The company also provided second-quarter guidance ahead of analysts' expectations.

The company earned $611 million, or 54 cents a share, compared with $491 million, or 43 cents a share, in the year-ago period. Excluding charges related to a change in accounting standards, UPS earned $611 million, or 54 cents a share, compared with $563 million, or 50 cents a share, in the first quarter of 2002. Analysts were expecting 51 cents a share.

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The company said the first two months of the quarter, which ended March 31, were hurt by severe winter weather, costing the company $30 million. The weak economy and a sharp rise in fuel costs also hurt the quarter's results. Volume growth in late March and into April, however, improved at the company's package business.

Total revenue was $8.02 billion, compared with $7.58 billion in the prior-year quarter. Revenue increased 23.5% to $1.3 billion in UPS' international segment, and its nonpackage segment posted sales of $693 million, an increase of 11.4%.

The company said it expects second-quarter earnings of 58 cents to 62 cents a share, compared with 54 cents a share in the second quarter of 2002. Analysts predicted 57 cents a share. "We expect domestic package volume to continue the momentum begun in March and April and post between a 1-to-2% increase over last year's second-quarter results," said Scott Davis, the company's chief financial officer.

The company also said it's on track to achieve its previously stated goal of 10% to 15% growth in earnings for full-year 2003. Analysts expect $2.33 a share. UPS earned $2.14 a share in 2002.

Shares of Atlanta-based UPS closed at $57.87 Monday.