NEW YORK -- UPS says online shoppers are propping up its business in a tough global economy.
The world's largest package delivery company believes that consumer demand for gadgets will drive its shipments and earnings this year, making up for slower trade between businesses.
The company also narrowed its earnings forecast for the year, and now expects growth of 5 to 7 percent from 2011. The stock rose almost 3 percent Tuesday afternoon.
UPS said it predicts earnings of $4.55 to $4.65 per share, compared with its earlier forecast of $4.50 to $4.70. The new outlook indicates that earnings in the fourth quarter will exceed Wall Street expectations.
"Global trade continues to be less strong than any of us would like at this point in time," CEO Scott Davis said in a conference call with analysts. "UPS has made the necessary adjustment. In the fourth quarter we expect to hit on all cylinders."
For investors, the outlook offset weaker results in the most recent quarter -- and lingering uncertainty about the economy.
For the three months ending in September, United Parcel Service Inc.'s net income fell 56 percent to $469 million, or 48 cents per share. The results were brought down by a big charge to restructure pensions. Without the charge, UPS would have earned $1.06 per share, matching Wall Street expectations.
Revenue fell less than 1 percent to $13.07 billion. Analysts polled by FactSet, on average, expected $13.32 billion.
Revenue and daily package volume improved at UPS' core U.S. package segment. But operating profit fell because higher prices weren't enough to offset increased fuel costs and lower average package weights.