UPS Sees Profits Jump 14 Percent with Ecommerce Driving Growth in Shipments

Riding high on booming ecommerce in the U.S., UPS (NYSE:UPS) has posted a profitable third quarter.

UPS 3rd Quarter 2016 Results

Domestic Shipments Drive Growth

In the third quarter, international operating profit went up 14 percent to $576 million, achieving the seventh consecutive quarter of double-digit growth.

What's more, average daily package volume grew 5.7 percent in the U.S. compared with the same period last year. That's more than double the 2.5 percent year-on-year growth in the second quarter.

In the U.S., business-to-consumer deliveries increased 11 percent in the last quarter, compared with 2 percent growth for business-to-business shipments.

Beating the Odds

It's worth noting that while the third-quarter profit was more or less in line with Wall Street forecasts, the company beat revenue projections.

Amazon CEO David Abney said that even with only moderate economic growth UPS has “good positive momentum … and we expect to have a real good fourth quarter.” He also added that the effect of the economy on the package delivery giant continues to be mixed.

Preparing for the Holiday Season

With the holiday season just around the corner, UPS says it's getting ready to handle the busiest time of the year.

The company expects to handle more than 700 million packages globally between Thanksgiving and New Year's Eve. That's 14 percent more than last year's holiday season.

Thanks to the enormous growth seen in international markets, UPS is now focusing on capturing these important regions. To that effect, the company has ordered 14 Boeing Co. 747 jumbo jets.

UPS has also opened or expanded 15 hubs across the U.S. in preparation for this year's holiday season. The company will fully deploy its new route navigation system, Orion, for the first time.

UPS Photo via Shutterstock

This article, "UPS Sees Profits Jump 14 Percent with Ecommerce Driving Growth in Shipments" was first published on Small Business Trends