Oct 25 - UPS' profit sharply rises on strong demand for domestic and European shipments as more shoppers go online. Fred Katayama reports.
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More Americans buying online means more packages shipped, and that helped UPS boost its revenues and profit just ahead of its busiest season of the year. Profit at its domestic package business rose sharply as UPS was able to charge higher rates for shipments.
Also helping fatten revenue: European exports rose 10 percent. But Asia, where UPS has been reducing cargo flights due to lower demand for express shipments, was flat.
UPS is seen as a bellwether for the global economy because of the huge volume of goods it transports globally. Investors seem to be betting on a continued recovery, for UPS stock has risen 28 percent this year to an all-time high. Its shares rose even higher after the report. But it's underperforming rival FedEx, whose shares are up 43 percent this year.
Like FedEx, UPS expects greater demand for its shipping services at peak times during the holiday shopping season as more shoppers go online. It expects volume will rise 10 percent on Cyber Monday, the Monday after Thanksgiving when online retailers dole out big discounts. It'll hire 55,000 drivers, sorters and other temporary employees to handle the increased volumes.
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