UPS announces Q4 and full year results
Company continues to make changes in attempt to adapt to difficult trading conditions
UPS announced adjusted diluted earnings per share of $0.83 for the fourth quarter, a 22% decline from the $1.07 adjusted diluted earnings per share for the same period last year. On a reported basis, diluted earnings per share were $0.25 and a loss of $2.52 for the fourth quarters of 2008 and 2007, respectively.
Reported results for the 2008 fourth quarter include the impact of a $575m non-cash impairment charge primarily related to the UPS Freight business unit due to an extremely challenging LTL environment. Reported results for the 2007 fourth quarter included a $6.1bn charge in the US Domestic Package segment related to the withdrawal of UPS employees from the Central States Pension Plan. That withdrawal followed ratification of a long-term national master agreement with the International Brotherhood of Teamsters.
For the full year, UPS posted adjusted operating profit of $6bn and adjusted diluted earnings per share of $3.50, within the range the company provided mid-year. On a reported basis, operating profit was $5.4bn and diluted earnings per share were $2.94.
“The severe decline in economic activity around the world resulted in sharply lower package and freight volumes for UPS,” said Chairman and CEO Scott Davis. “Consequently, we’re making the tough decisions necessary to adapt our enterprise to today’s realities. This includes changes in organizational structure, compensation and network configuration.”
For example, UPS has consolidated operating districts, reduced air segments and eliminated some package handling operations. The company also announced it is freezing management salaries and suspending the match for its 401(k) plans. It did not make any changes to its long-standing defined benefit pension plans.
For the three months ended 31 December 2008, consolidated package volume declined 3.7% to one billion pieces on 5% lower revenue. Declining fuel costs provided a benefit in the quarter, which was more than offset by the effects of economic deceleration around the world.
For the full year, the company delivered 3.9 billion packages, an average of 15.5 million per day. Consolidated revenue increased 3.6% to $51.5bn.
