BREAKING NEWS

BREAKING NEWS

UPS strong profit gain overshadowed by trade war worries, shares fall

Now Reading :

UPS strong profit gain overshadowed by trade war worries, shares fall

UPS strong profit gain overshadowed by trade war worries, shares fall
@ Copyright :
CHARLES PLATIAU(Reuters)
Text size Aa Aa

(Reuters) - United Parcel Service Inc's <UPS.N> domestic business helped fuel a 20 percent rise in quarterly profit on Wednesday, but shares dropped 4.3 percent after it said changing U.S. trade policies weighed on international results.

UPS shares fell $4.89 to $109.35 a share in premarket trading after investors zeroed in on company comments "regarding tariffs and trade war between the U.S, and China, which caused International segment revenue to fall below our and Street projections," Cowen analyst Helane Becker said in a client note.

gi

The rapid rise in online shopping has been a boon for UPS, but that has left it scrambling to cut extra costs related to delivering parcels to households compared with businesses that generally receive parcels in bulk.

The company is spending billions of dollars to upgrade and expand its network and is in the early stages of its largest capital spending campaign since the 1980s.

The world's largest delivery company said revenue at its U.S. package services rose 8.1 percent in the third quarter, while revenue at its international package segment rose 3 percent.

Net income rose to $1.51 billion, or $1.73 per share, in the third quarter ended Sept. 30, as its tax expense fell to $381 million.

Excluding items, the company earned $1.82 per share, in line with analysts' expectations, according to Refinitiv data.

Total revenue rose 8 percent to $17.44 billion, narrowly missing expectations for $17.46 billion.

The company said it now expects free cash flow to be over $5 billion but stuck to its forecast for full-year adjusted earnings of $7.03 to $7.37 per share.

(Reporting by Lisa Baertlein in Los Angeles and Rachit Vats in Bengaluru; Editing by Arun Koyyur)

euronews provides breaking news articles from reuters as a service to its readers, but does not edit the articles it publishes. Articles appear on euronews.com for a limited time.