United Parcel Service reported a higher quarterly profit as margins improved in the face of flat domestic shipping volume dulled by a sluggish economy, and it affirmed its outlook for record 2011 results.
UPS has forecast record earnings per share of $4.15 to $4.40 this year on the back of cost cuts and higher shipping rates in the face of a slowly expanding global economy.
UPS produced another solid quarter of earnings growth against the backdrop of a deceleration in exports from Asia and a challenging global economic environment, Chief Executive Officer Scott Davis said in a statement.
The company's shares declined 1.4 percent to $69.89 in premarket trading.
Domestic shipping volume averaged 12.74 million packages a day, little changed from 12.73 million a year ago. Operating margins improved on higher yields, or revenue per package, as well as on more efficient networks, the company said.
International shipping volume averaged 2.34 million a day, up from 2.24 million.
Revenue in this segment rose more than 14 percent, twice the rate in the domestic segment, driven by 6.5 percent growth in export volume.
UPS and FedEx Corp are considered economic bellwethers because of the sheer volume of packages they handle.
The value of packages handled by UPS's trucks and planes each year is equivalent to about 6 percent of U.S. gross domestic product and 2 percent of global GDP.
The world's largest package delivery company said third-quarter net income rose to $1.04 billion, or $1.06 per share, from $991 million, or 99 cents a share, a year earlier.
Analysts on average were expecting $1.05 per share, according to Thomson Reuters I/B/E/S.
Revenue rose 18 percent to $13.17 billion, matching the analysts' average forecast.
(Reporting by Lynn Adler in New York; Editing by Lisa Von Ahn)