United Parcel Service Inc (NYSE:UPS) saw its shares rise more than 2% on Tuesday after quarterly profits came in better than expected, with cost-cutting measures helping offset weakened demand.
Underlying profits slipped year-on-year by 35% to US$1.43 per share in the first quarter. However, this was ahead of Wall Street’s guidance of US$1.29.
Sales during the period missed market estimates by around US$200 million after it came in at US$21.7 billion.
Volumes continue to be under strain, with daily average volumes slipping by 3.2% in its core US business and by 5.8% in international operations.
Nevertheless, management said volumes had shown “improvement through the quarter”.
One way UPS is battling weaker volumes is by growing the number of high-margin deliveries for small and healthcare businesses.
Healthcare-related revenue is expected to double to US$20 billion by 2026.
Back in January, the courier said it planned to cut 12,000 non-union jobs as part of a wider US$1 billion cost-cutting strategy.
UPS’s planned job cuts came less than a year after it penned a deal with the Teamsters union, part of which agreed to pay new part-time workers a starting salary of US$21 per hour.