United Parcel Service Inc. Tuesday beat expectations for quarterly adjusted profit, as it prioritized shipments of high-margin parcels and kept a tight lid on costs amid a softening e-commerce environment.
Shares of the world's largest parcel delivery firm, which raised its quarterly dividend by 6.6% to $1.62 and announced a new $5 billion share repurchase plan, rose 2.2% in premarket trading.
The company has benefited in recent quarters from a strong focus on moving parcels that bring in more money and its investment in technology such as automated bagging, robotic sorting of parcels and autonomous vehicles.
It has also controlled costs better than rival FedEx Corp., despite having a unionized workforce.
UPS reported an adjusted profit of $3.62 per share for the fourth quarter ended Dec. 31, above Wall Street's expectations of $3.59 per share.
However, revenue for the quarter fell 2.7% to $27.0 billion, missing analysts' average estimate of $28.09 billion, hit by softening e-commerce demand and a severe winter storm that affected several U.S. shipping hubs and delayed parcel delivery.
UPS forecast 2023 full-year revenue between $97.0 billion and $99.4 billion, compared with analysts' expectations of $99.98 billion, as per Refinitiv data.
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