UPS posts bigger quarterly profit, sees strong holiday volumes

United Parcel Service Inc posted a bigger quarterly profit, led by increased demand in domestic ground shipments, and the courier company said it expects online sales to boost holiday volume.

Shares rose 2 percent Friday before the markets opened.

Shipment volume and forecasts at UPS, along with rival FedEx Corp , are closely watched by Wall Street and considered an indication of overall economic health because of the vast amount of goods they transport.

For this year's holiday season, UPS said it expects peak season daily volume to increase by 8 percent, with pick-up volumes for Cyber Monday increasing 10 percent. Earlier in the week, rival FedEx forecast an 11 percent rise for the same day, the Monday after Thanksgiving that is traditionally a big day for online holiday sales.

For the third quarter, the Atlanta-based company earned $1.10 billion, or $1.16 a share, compared with $469 million or 48 cents a share a year earlier.

Revenue came in at $13.52 billion, up 3.4 percent over last year, mainly helped by U.S. e-commerce shipments and strong European export growth.

Analysts, on average, were expecting the company to earn $1.15 a share, on revenue of $13.6 billion, according to Thomson Reuters I/B/E/S.

(Reporting by Nivedita Bhattacharjee in Chicago; Editing by Gerald E. McCormick)