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UPS delivers record profit
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July 20, 2000: 9:11 a.m. ET
Meets 2Q forecasts with overseas growth; announces fuel surcharge
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NEW YORK (CNNfn) - United Parcel Service, the world's largest package delivery company, delivered record second-quarter earnings in line with analysts' forecasts Thursday and announced a surcharge to deal with increased fuel prices.
UPS has held off longer than most freight or passenger transportation companies in turning to customers to deal with fuel price increases. The 1.25 percent surcharge, to take effect Aug. 7, still is smaller than many competitors levied, such as the 4 percent charge being collected by FedEx Corp. (FDX: Research, Estimates) since earlier this year.
 Still, one analyst believes the surcharge is good news for investors if not for customers.
"We expect the stock to rally on the unexpected fuel surcharge announcement," said Ed Wolfe, analyst with Bear Stearns. "Back of the envelope fuel surcharge could equate to 1 to 2 cents upside in the third quarter, 4 to 5 cents a share upside for the fourth quarter and 15 to 20 cents upside during 2001 if it were to remain in effect."
UPS, which termed the surcharge temporary, said it was necessary because fuel costs had not dropped as anticipated.
Strong earnings, revenue growth overseas
For the quarter, UPS posted net income of $695 million, or 60 cents a diluted share, the same as the consensus estimate of analysts surveyed by First Call.
The company posted earnings excluding special items of $588 million, or 52 cents a share, in the year-earlier period. Including that special item, related to a possible tax settlement, the company posted a net loss a year ago of $854 million, or 77 cents a share.
Revenue gained 11 percent to $7.3 billion from $6.6 billion as average daily package volume climbed 7 percent to 13.2 million. The greatest growth came in overseas operations.
For the first six months, net income rose to $1.5 billion, or $1.27 a diluted share, compared with a net loss of $355 million, or 32 cents a share, a year earlier. Year-to-date revenue gained 12.5 percent to $14.5 billion from $12.9 billion.
Shares of UPS (UPS: Research, Estimates) gained 1/2 to 61-1/4 in trading Wednesday. 
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UPS
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