UPS 2nd-qtr profit rises, tops estimate, despite lower revenue

(Adds details of results, background, stock price)

By Nick Carey

CHICAGO, July 28 (Reuters) - Package delivery company United Parcel Service Inc on Tuesday reported higher second-quarter net profit as improved margins offset a drop in revenue.

Shares in Atlanta-based UPS were up 2 percent at $97 in premarket trading.

Total revenue fell 1.2 percent from a year ago to about $14.1 billion in the quarter. UPS said the strong U.S. dollar and lower fuel surcharges hurt revenue growth during the second quarter. When main rival FedEx Corp reported quarterly results in June, the Memphis-based company said lower fuel surcharges had cut into revenue.

UPS reported second-quarter net income of $1.23 billion, or $1.35 per share, up nearly 10 percent from $1.12 billion, or $1.21, a year earlier.

Analysts, on average, expected earnings per share of $1.26.

The company expects full-year 2015 earnings per share in a range from $5.05 to $5.30, unchanged from its last earnings report in April, though the company added that it would be at the high end of that forecast.

"Even though the U.S. economy appears to be growing at a slower pace, our global portfolio and performance reinforces our expectations to attain the higher end of the guidance range." Chief Financial Officer Richard Peretz said in a statement.

Analysts, on average, expect full-year earnings per share of $5.19.

Volume growth and price increases boosted margins at its international package business.

The strong dollar drove down revenue for the company's higher-margin international package business more than 6 percent, while revenue in the U.S. domestic package market, by far its largest business, rose 1.6 percent.

(Editing by Jeffrey Benkoe)