UPS second-quarter profit tops estimates; sees sluggish U.S. economy
By Nick Carey
(Reuters) - Package delivery company UPS UPS.N on Tuesday reported a better-than-expected second-quarter profit on improved margins, and said U.S. economic growth was being hampered by a strong dollar and an expected interest rate hike.
Shares in Atlanta-based United Parcel Service Inc rose more than 2 percent.
"The continued strength of the U.S. dollar and I think this impending rate hike by the Fed appears to be holding back some U.S. growth," Chief Executive Officer David Abney said on a conference call.
Abney said UPS remained "a little bit cautious about the U.S. economy."
Like main rival FedEx Corp (FDX.N: Quote), UPS is often seen as a bellwether of U.S. economic health. An interest rate hike is widely expected this year.
UPS revenue fell 1.2 percent from a year ago to about $14.1 billion in the quarter. UPS said the strong U.S. dollar and lower fuel surcharges hurt growth. When reporting quarterly results in June, Memphis-based FedEx said lower fuel surcharges had cut into revenue.
UPS reported second-quarter net income of $1.23 billion, or $1.35 per share, up nearly 10 percent from $1.12 billion, or $1.21, a year earlier.
Analysts, on average, expected earnings per share of $1.26. Continued...