United Parcel Service, Inc. (NYSE: UPS – $112.41), the world’s largest package delivery company, reported a rise in first-quarter net profit, driven by strong package volumes in its core U.S. domestic segment and its international business, which climbed 15%. Total revenue increased to $10.2 billion, 7% above last year. UPS’ Supply Chain segment grew profits 14% on a 16% increase in revenue. For the period, adjusted income rose 17% to $1.35 billion, or $1.55 per share, up from a $1.33 a year earlier and a penny above expectations. UPS cited higher costs in its large domestic segment from several issues, including severe winter weather, which added $85 million in costs to the period. In addition, the company’s expenses included continued rollout of Saturday delivery operations, projects to expand its network and higher pension expenses.
Atlanta-based UPS also holds its outlook steady for the year, which includes big investments to upgrading its network. The company expects 2018 adjusted earnings per share to be in a range of $7.03 to $7.37, which spans the Street consensus average of $7.25 and $6.00 for 2017. Shares of this high-quality service provider, yielding 3.4%, can be held for long-term recovery.