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UPS quarterly profit up 193pc to US$1.33 billion as revenues rise 1pc

UNITED Parcel Service's fourth quarter year on year net profit increased 193 per cent to US$1.33 billion, drawn on revenues of $16.1 billion, which increased one per cent.

The Atlanta-based company was under pressure to deliver in the fourth quarter after two disappointing peak seasons in a row, Reuters reported.

In 2013, UPS was caught by a late surge in e-commerce packages, leaving many stranded on Christmas Eve. In 2014, the company overspent for a package surge that did not materialise.

In the run-up to Christmas 2015, UPS worked to manage package flows, but to control its costs it also made clear to retail customers that if they missed key deadlines ahead of the holiday for ground deliveries, they would be charged more for moving those packages by air.

Revenue at the company's core US domestic package service rose 2.6 per cent to $10.3 billion. Average daily shipments rose 2.4 per cent on strong demand in the quarter from online retailers. Packages sent by air saw double-digit growth.

The company's international package unit was more profitable in the quarter, thanks largely to a strong performance in Europe.

"Disciplined pricing, favourable customer and product mix, combined with improved operational performance" to boost profitability, the company said.

UPS said it expects full-year earnings per share for 2016 between $5.70 and $5.90. Analysts predicted earnings per share for the year of $5.73.

"While we face uncertain macro-economic conditions, we are continuing to invest for profitable growth," chief financial officer Richard Peretz said.