UPS reports higher profit amid supply chain improvements, climbing demand from China

The logistics company the United Parcel Service (UPS) reported its quarterly earnings this week, topping analysts' expectations on improved growth in China and business cost reductions, according to a published report.

The Wall Street Journal reports that UPS' second fiscal quarter profit jumped 26 percent from the same period in 2010. The uptick was fueled by an expansion in both China and Europe, according to UPS officials. Company officials warned that it faces depressed demand in the U.S. amid economic uncertainty fueled by the stalled debt talks.

"Gridlock in the nation's capitol clearly is not helping," UPS chief executive Scott Davis said. "Consumer confidence is down because of it."

While UPS expects domestic growth to be flat in the coming third quarter, the company said it expects the economy to pick up during the fourth quarter. That, of course, is dependent on officials coming to an agreement on the debt ceiling and deficit reduction packages. Profit growth in international markets, meanwhile, is expected to expand in the upper teens.

Supply chain revenue at the company grew by 7 percent during its second quarter, fueled by efficiency improvements.