UPS Inc., the world’s largest shipping carrier, reported a more than 16 percent jump in first-quarter profit on strong growth in revenue and its international operations.
The results, announced before the market opened Thursday, beat Wall Street expectations. UPS also boosted its earnings guidance for the full year.
For the three months ending March 31, the Atlanta-based company formerly known as United Parcel Service Inc. said it earned $882 million, or 78 cents a share, compared to a profit of $759 million, or 67 cents a share, a year ago.
Analysts surveyed by Thomson Financial were expecting earnings of 73 cents a share.
Revenue in the January-March period rose nearly 11 percent to $9.89 billion, compared to $8.92 billion recorded a year ago.
“We had a great start to the year. The first quarter set the pace for UPS to generate earnings in 2005 at the higher end of our historical range,” said Scott Davis, UPS’s chief financial officer. “We grew our international operating profit by more than 25 percent and we did a very good job of managing our costs.”
He added, “Our cost initiatives are taking hold and we are benefiting from the deployment of package flow technology in the U.S. operation. There is strong momentum throughout all three business units.”
UPS also announced a change to its management bonus program, moving from a fixed profit-sharing plan to a performance-based plan.
The company said this change had a positive impact on compensation expense for the quarter of 4.5 cents per share, and will have comparable benefits for the rest of the year.
As a result, the company raised its guidance for 2005 full-year earnings growth to the range of 16 percent to 20 percent over the adjusted $2.90 a share reported for 2004. Previous guidance was for growth of 13 percent to 17 percent.