United Parcel Service Inc. posted profit that beat analysts’ estimates as price increases and efficiency gains helped offset higher costs and a decline in package deliveries.
Adjusted earnings were $3.05 a share in the first quarter, the Atlanta-based courier said in a statement Tuesday. Analysts had predicted $2.88. Revenue rose 6.4% to $24.4 billion.
The company raised prices and focused more on higher-paying small businesses during the period of higher demand for post, and Chief Executive Officer Carol Tome shored up margins by routing parcels more efficiently and shedding a low-profit freight unit.
“The agility of our network and the continued execution of our strategy delivered another quarter of strong financial performance,” Tome said.
The shares rose 3.4% to $196 in pre-market trading trading. UPS has declined 12% this year while the S&P 500 Index dropped 9.9%
Average package volume dropped 3.6% from a year earlier, though the company made up for that with a 9.4% gain in revenue per parcel. The pricing power helped UPS increase adjusted operating margin to 13.6% from 12.9% a year earlier.
UPS plans to double share repurchases this year to $2 billion, and reiterated a 2022 revenue goal of $102 billion. Adjusted operating margins are still seen at about 13.7%.