Shares of UPS surged as demand for faster delivery powered a second quarter that beat Wall Street expectations.
The shipping company reported earnings of $1.96 per share on $18.048 billion in revenue. Analysts expected $1.92 in earnings per share and $17.966 billion in revenue, according to Refinitiv. Volume for NextDay Air increased by more than 30%, fueling a 7.7% rise in domestic revenue compared with the same quarter last year.
The shares jumped nearly 9% on Wednesday.
CEO David Abney said on CNBC’s “Squawk on the Street” that increased demand for quick shipping is a structural change and that he expects smaller retailers to join e-commerce giants like Amazon in offering the service. Abney said UPS is well-positioned to take advantage of that demand.
“What’s great for us is we have the capacity. We have added the aircraft. We’ve got 11 coming in this year. So when you can time a structural shift with your investments, it just doesn’t get much better than that,” Abney said on CNBC’s “Squawk on the Street.”
Before its earnings release, the Atlanta-based company announced it would be expanding to seven day a week delivery and is seeking approval from Federal Aviation Administration to deliver packages with drones under certain circumstances.
“As a company, we had to realize that Saturday and Sunday are just like another day of the week,” Abney said.
Overall, the company saw revenues rise 3.4% year on year as a slowdown in its international segment weighed on the U.S. growth. UPS provided earnings guidance of between $7.45 and $7.75 per share for the full fiscal year.