UPS profit falls 56%
UPS announced its first-quarter profit plunged 56% as trade and business deteriorated with the global economy.
UPS announced its first-quarter profit plunged 56% as trade and business deteriorated with the global economy.
Furthermore, UPS provided a weaker second-quarter outlook, with earnings in the range of 45 to 55 cents a share.
“Economic indicators tell us recovery in the U.S. might begin late this year, but more likely not until 2010,” said chief financial officer Kurt Kuehn in a statement.
For the recent quarter, UPS said its net income fell to $401m, or 40 cents a share, from $906m, or 87 cents a share in the year-ago period.
Adjusted net income for the latest period, reflecting the earlier-than-expected retirement of aging aircraft, totaled 52 cents a share. Analysts expected net income of 55 cents a share.
Revenue dipped 13.7% to $10.9bn as consolidated average-daily volume declined 3.9% to 14.5m packages.
The average revenue for each package fell 6.9%, reflecting changes in product mix, declining fuel surcharges and package weight, and the negative impact of currency.
Wall Street was looking for revenue of $11.5bn.
UPS said its scaling back 2009 capital spending by an additional $200m, bringing the total to just below $2bn.
“As economic activity deteriorated throughout the world during the quarter, we managed costs while maintaining our excellent service to our customers,” said chairman and chief executive Scott Davis, in a statement.
Nonetheless, UPS said it continues to make strategic investments, such as expanding its Worldport facility, building a new air hub in Shenzhen, China, and opening new healthcare distribution facilities in Europe and Puerto Rico.
UPS ended the quarter with $4.3bn in cash and marketable securities.
