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UPS quarterly profit misses forecast

United Parcel Service Inc. (UPS-N) reported lower-than-expected quarterly earnings on Thursday, as margins were hurt by customers choosing slower delivery options and shipments from Asia weak as well.

Shares in the world's largest package delivery company fell on the results, which chief executive Scott Davis said reflected austerity measures in Europe and slowing growth from Asia.

"During the quarter the most positive news has come from the U.S. where indications of economic rebound are evident," Scott said on a conference call with analysts.

UPS said net profit rose 6 percent to $970 million US, or $1.00 per share in the first quarter, from $915 million, or 91 cents a share, a year earlier. Analysts had expected a profit of $1.02 per share, on average, according to Thomson Reuters I/B/E/S.

Total revenue rose 4.4 percent to $13.14 billion, just shy of the $13.26 billion average forecast according to Thomson Reuters I/B/E/S.

"Customers are going toward slower delivery methods -- deferred delivery had strong growth" of about 10 percent, said Edward Jones analyst Logan Purk. "The international business is also definitely underperforming the domestic and that's impacting the results."

Domestic revenue rose 6.2 percent and international revenue increased 2.3 percent.

In the international segment, UPS said weakness out of Asia and increased intra-regional volumes hurt revenue per piece.

"Increases in revenue per piece caused by higher base rates and fuel surcharges were mostly offset by changing product and customer mix as lower-margin e-commerce continued to drive volume growth" in the domestic business, UPS said.

Lightweight ground shipments increased, also curbing revenue per piece, UPS said.

The company maintained its full-year forecast of $4.75 to $5.00 earnings per share. CTV Two CTV News CTV News Channel BNN - Business News Network CP24