UPS Earnings Beat on Growth in Exports, Ground

United Parcel Service (UPS) reported quarterly earnings that topped analysts’ forecasts on Thursday, helped by improvement in ground and export shipments.

(Photo by Justin Sullivan/Getty Images)Immediately after the earnings announcement, the company’s shares fell slightly in pre-market trading. (Click here to get the latest quotes for UPS: UPS)

As cost-conscious consumers shift from air express to slower and cheaper modes of shipping, UPS’s stronger North American domestic network puts it in a better position than rival FedEx, which focuses more international air shipments.

The world’s largest package-delivery company posted first-quarter earnings excluding items of $ 1.04 per share, up from $ 1 a share in the year-earlier period.

Revenue increased to $ 13.43 billion from $ 13.14 billion a year ago.

Analysts had expected the company to report earnings excluding items of $ 1.01 a share on $ 13.46 billion in revenue, according to a consensus estimate from Thomson Reuters.

The company said it benefited from a stronger-than-expected post- holiday season in January. Global export volume increased 3.8 percent, driven by an 8 percent increase in shipments to Asia.

In the quarter, UPS delivered 16.2 million packages a day, up 4.1 percent from the same period a year earlier.

Separately, UPS announced plans to purchase Hungary-based pharmaceutical logistics company CEMELOG Zrt. UPS expects to complete the transaction in the second quarter of 2013,

UPS dropped its $ 7 billion bid for Dutch delivery firm TNT Express in January after European regulators said they would veto the deal on antitrust concerns.

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SAP net up 17 pct, cloud computing fuels growth

FRANKFURT, Germany (AP) — Business software maker SAP says net profit increased 17 percent in the first quarter, as its remote cloud computing business showed strong growth to complement its longstanding sales of software that runs on company premises.

Profits rose to €520 million ($ 678 million) from €444 million euros in the same quarter a year ago. Revenues rose 7 percent to €3.60 billion.

SAP, based in Walldorf, Germany, said cloud revenue was up 380 percent at €167 million.

The company also said its high-speed data analysis product HANA tripled revenue to €86 million. HANA enables companies to quickly see patterns in data so they can react to them.

The company said it was on track to increase cloud revenue to €2 billion in revenue by 2015.

Co-CEO Jim Hagemann Snabe said that “SAP had a very good start to 2013” and that “the business mix is working, and I see growth in all categories going ahead.”

In cloud computing, companies pay a subscription fee to use software on off-site servers rather than installing it at their own offices. The approach is a shift from the company’s longstanding model of selling software and then profiting both from that and the follow-up services revenue from support and training.

Revenue rose 49 percent in the Americas but fell in Asia, where the company said key country leadership positions had been vacant.


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Infosys forecasts tepid revenue growth, shares dive

By Harichandan Arakali

BANGALORE (Reuters) – Infosys Ltd, India’s No. 2 IT services exporter, forecast lower revenue growth than analysts had expected for this fiscal year, citing a challenging global economy, sending its shares tumbling nearly 18 percent.

The company said it expects dollar revenue for the fiscal year that began this month to grow between 6 percent and 10 percent. Most analysts had estimated that Infosys would set a target for revenue growth of as much as 12 percent.

Infosys has been focusing on stepping up sales, with a willingness to sacrifice margins, to help it win business and halt its loss of market share.

For about two years, Infosys, a bellwether of India’s $ 108 billion IT services sector, had been losing market share to more aggressive rivals such as industry leader Tata Consultancy Services Ltd (TCS) and No. 4 HCL Technologies Ltd.

The rough patch was caused in part by the challenge of implementing its “Infosys 3.0” push for revenue through the development of its own software platforms, to differentiate its services from those of its competitors, amid sluggish demand from clients in its core western markets.

“The forecast looks quite conservative, which is a concern. The fiscal 2013 was also not very good for Infosys,” said K.K. Mital, CEO for portfolio management services at Globe Capital in New Delhi.

“This looks like company specific problem. Even mid-cap companies are expected to perform better than this.”

Consolidated net profit for the fiscal fourth quarter ended March 31 was 23.9 billion rupees ($ 438 million), compared with 23.16 billion in the same period a year earlier. Revenue for the quarter rose 18 percent to 104.5 billion rupees.

That compared with an average estimate of 23 billion rupees in a survey of 18 analysts by Thomson Reuters I/B/E/S. Revenue was expected to have risen 21 percent to 107 billion rupees.

Infosys also said it would set aside up to $ 100 million to invest in products, platforms and solutions ideas.

Shares of the company, valued at about $ 30 billion, gained nearly 26 percent so far this year as of Thursday after falling 16 percent in 2012.

($ 1 = 54.5 Indian rupees)

(Reporting By Harichandan Arakali; Editing by Chris Gallagher)


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FedEx sees global GDP growth of 2.3% in 2013, 3% in 2014

On its Q3 earnings conference call, FedEx (FDX) said it has adjusted its GDP and industrial production forecasts since its last earnings call. The company now projects U.S. GDP to grow 2% in calendar year 2013 and 2.5% in calendar 2014. The shipper sees industrial production growth of 3% in 2013 and 3.5% in calendar 2014. FedEx gave a global GDP forecast of 2.3% growth in 2013 and 3% in 2014.


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Keller Group sees U.S. budget cuts slowing down growth

By Abhirup Roy

(Reuters) – British construction company Keller Group Plc’s (KLR.L) full-year profit nearly doubled as home building picked up in the United States, but the company said it expected spending cuts to slow down growth in the key market.

There is uncertainty in the U.S. construction market as a second round of budget cuts, or “sequestration”, hit the country’s economy last week.

“I would not expect the revenue growth (in North America) to be as strong as it was in 2012 or 2011,” Keller Chief Executive Justin Atkinson said.

Revenue from the company’s North American business, which accounted for a little less than half of Keller’s 2012 revenue, increased 23.5 percent last year and 10.8 percent in 2011.

Keller’s profit before tax jumped to 43.5 million pounds ($ 65.3 million) in 2012 from 21.9 million pounds a year earlier.

Revenue increased 14 percent to 1.32 billion pounds. Revenue from its North American business rose to 581.9 million pounds from 471.1 million a year earlier.

Spending on private residential projects in the United States increased 2.2 percent in December, a reflection of the country’s improving housing market.

Revenue from EMEA (Europe, Middle East and Africa) fell to 358.6 million pounds from 384.8 million, while operating margin slipped to 0.6 percent from 2.2 percent.

Atkinson said he expected the European business to “continue to struggle”, hurt by austerity measures by several governments.

Keller’s shares, which have risen about 80 percent in the past year, were up 1.8 percent at 759.5 pence on the London Stock Exchange at 1219 GMT.

($ 1 = 0.6662 British pounds)

(Reporting By Abhirup Roy in Bangalore; Editing by Ted Kerr and Joyjeet Das)


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