UPS Reports 4Q Profit; Revenue Slips
UPS Inc. said Tuesday it earned $254 million, or 25 cents per share, in the fourth quarter, though its revenue declined and it warned this year would be difficult in light of the struggling economy.
The company said it was taking cost-cutting measures such as freezing management salaries and that it is suspending its matching contributions to employees’ 401(k) voluntary retirement plans.
Fourth-quarter revenue slipped to $12.7 billion, from $13.4 billion a year ago.
UPS had reported a $2.6 billion loss, or $2.52 a share, in last year’s fourth quarter, largely based on charges related to exiting a union pension plan.
Its supply chain & freight segment’s fourth-quarter revenue fell 6.5% and its adjusted operating profit of $53 million represented a $29 million decrease over last year’s results.
Less-than-truckload revenue at its UPS Freight unit fell 9.6%, with shipments per day down 8.2% in the “weakest LTL environment in decades,” the company said.
Fourth-quarter U.S. package revenue slipped to $8 billion, from $8.3 billion, while international package revenue fell to $2.64 billion, from $2.87 billion.
For the full year, UPS posted an adjusted operating profit of $6 billion and adjusted diluted earnings per share of $3.50, within the range of its mid-year guidance. Its operating profit was $5.4 billion, or $2.94 per share, on a reported basis.
Full-year revenue rose 3.6% to $54.5 billion.
“The severe decline in economic activity around the world resulted in sharply lower package and freight volumes,” Chairman and Chief Executive Officer Scott Davis said.
UPS said it has taken cost-cutting measures such as consolidating its operating districts, reducing some air segments and eliminating some package handling operations.
Although it is suspending its company match on employees’ 401(k) plans, the company said it did not alter its longstanding defined benefit pension plans.
Because of the uncertain economic situation, the company only provided first-quarter earnings guidance, saying it would earn 52 cents to 68 cents per share.
UPS is ranked No. 1 on the Transport Topics 100 listing of U.S. and Canadian for-hire carriers.
