United Parcel Service on Tuesday reported third-quarter results that surpassed Wall Street expectations and raised its full-year guidance for the second consecutive quarter. The company now projects full-year consolidated revenue of approximately $92.6 billion, up from its previous forecast of $91.2 billion, with fourth-quarter revenue expected at $25.7 billion.
For the quarter ended Sept. 30, UPS reported net income of $1.16 billion, or $1.37 per share, down slightly from $1.31 billion a year earlier. Adjusted for one-time expenses, earnings per share came in at $1.69, above the $1.63 expected by analysts surveyed by LSEG. Revenue rose 6.7% to $22.9 billion, also exceeding the $22.29 billion consensus estimate.
The domestic segment saw a 4.5% revenue increase, while international revenue rose 7.1%. The supply chain solutions business led with an 18.2% jump, which UPS said was primarily driven by growth in forwarding and logistics, including healthcare.
On a call with analysts, CEO Carol Tomé said healthcare revenue exceeded $3 billion for the third consecutive quarter. The company had previously expected third-quarter domestic revenue to be flat and average daily volume to decline due to seasonal factors and reduced business with Amazon. "We're driving more premium growth, improving revenue quality and mix, and creating greater operating leverage through a more efficient network," Tomé said. "All of this is strengthening the underlying performance of our business."
UPS has been executing a turnaround under Tomé's leadership, focusing on automation and a leaner business model. Tomé said the consumer remains resilient and that growth in average daily volume between the third and fourth quarters will be consistent with last year, though fourth-quarter domestic volume is expected to fall due to the reduction with Amazon. She added that nearly 70% of all packages will flow through automated processes this holiday season.
Shares of UPS rose slightly in premarket trading following the announcement.