Investing.com -- Shares in United Parcel Service (NYSE:UPS) jumped more than 6% in early trading Thursday after the logistics group reported higher-than-anticipated third-quarter earnings that were buoyed by increased domestic volumes and cost reductions.
UPS posted earnings per share of $1.76 in the three months ended on Sept. 30, topping the consensus estimate of $1.63. Revenue for the quarter reached $22.2 billion, also slightly ahead of the $22.08 billion expected by analysts.
Average daily volume in the US ticked up by 6.5%. Volumes at UPS have improving since May in the country, reversing a multi-quarter downturn that was fueled a weak demand among inflation-squeezed consumers.
US package revenue totaled $14.45 billion, marking a 5.8% year-over-year increase and exceeding the $14.34 billion projected by Wall Street. International package revenue, meanwhile, came in at $4.41 billion, up 3.4% from the prior year, driven in part by an increase in prices per package.
"After a challenging 18-month period, our company returned to revenue and profit growth,” said UPS Chief Executive Officer Carol Tomé in a statement. “Peak season is nearly upon us, and we are ready to deliver another successful holiday season and continue the progress we demonstrated in the third quarter.”
For its 2024 fiscal year, UPS now forecasts revenue of $91.1 billion, slightly lower than consensus estimates of $91.85 billion.
The firm also raised its full-year operating margin outlook to approximately 9.6%. UPS had previously cut the target to 9.4% in July, due in large part to bargain e-commerce retailers like Shein and Temu driving much of its volume growth -- a trend that industry experts say led to more items being shipped via cheaper ground services and not through pricier air services.
(Vahid Karaahmetovic contributed reporting.)