- High Roller Sues Harrah's for Lost Millions
- Big Shareholders Ask Goldman to Cut Bonuses: Report
- GE, Vivendi $1 Billion Apart over NBCU Stake: Report
- In Wall Street's Back Yard, Unemployment Rises
- Dell Shares Smacked as Earnings, Sales Miss Forecasts
- US Senators Want Probe into Alleged Yuan 'Manipulation'
- Oprah to Leave Syndication in 2011
- The Art of the High-End Comic Strip
- Heidi Klum Wows Crowd at Victoria's Secret Show
- Drugs, Booze and Vegas
- Expect a 5-10% Market Pullback: Stock Picker
- Dell Has Some Explaining to Do
- 3 Stock Picks for This Volatile Environment: Portfolio Manager
- Tamminen: California Is At It Again
- Iverson Wasn't A Popular "Answer"
- Nov. 19: Unusual Volume Leaders
- 3 Financial Stocks May Lead Final Rally: Market Researcher
- My Top 10 Marketing Ideas For Winless Nets
MOST SHARED
- Drugs, Booze and Vegas
- Big Shareholders Ask Goldman to Cut Bonuses: Report
- If You Like Dividends, You May Love These 9 Stocks
- Mad Mail: Buy RIMM or Apple?
- Consumers, Retail & Internet Search
- JAL Reportedly Facing $1.1 Billion Derivatives Charge
- Applied Materials CEO on Economy
- The 'Real' Jobless Rate: 17.5% Of Workers Are Unemployed
- Oprah to Leave Syndication in 2011
Text Size 
United Parcel Service, the world's largest package delivery service, reported a 43 percent drop in earnings that nonetheless topped analysts' forecasts, saying that cost-cutting helped its profit margins.
 |
Chris Gardner / AP |
But the company said Thursday that the outlook for holiday season — when it transports orders from major retailers as well as consumer purchases — remained unclear, with online merchants more confident about the season than their bricks-and-mortar rivals.
"As I look at the global business environment, I am encouraged that recovery is underway," Chief Executive Scott Davis said on a conference call with analysts. But he cautioned that the economy had "a long way to go."
The Atlanta-based company took a more conservative tone than its main rival FedEx [FDX
Loading...
()
], which said last month that the economy appeared to be stabilizing.
"They are way more cautious than the management team at FedEx. Both companies reported strong earnings, but the commentary for the next quarter and next year is different," said Guaylon Arnic, analyst at Profit Investment Management, which owns UPS shares.
UPS shares [UPS
Loading...
()
] were down about 1 percent on the New York Stock Exchange.
Less Holiday Hiring
UPS, which has cut its headcount by some 17,000 jobs over the last year, plans to continue its normal practice of adding temporary workers to help with the holiday rush. This year it will likely add about 50,000 — fewer than usual — U.S. seasonal, executives said on a conference call.
That is down from the 60,000 it added in the pre-downturn 2007 holiday season. UPS current employs about 400,000 people worldwide.
Retailers from Wal-Mart Stores [WMT
Loading...
()
] to Amazon.com [AMZN
Loading...
()
] are facing a bleak season, consumers planning to spend about 3.2 less, according to a survey by a trade group.
Four of five online retailers plan to offer free shipping, with conditions, at some point during the holiday season — a move that could spur demand for UPS and FedEx's services.
Profit Tops Street View
UPS said on Thursday that third-quarter profit fell to $549 million, or 55 cents per share, from $970 million, or 96 cents per share, a year earlier.
Analysts on average had looked for earnings of 52 cents per share, according to Thomson Reuters I/B/E/S.
Revenue tumbled 14.9 percent to $11.15 billion, while analysts were expecting $11.17 billion.
Operating expenses, factoring out volatile fuel prices, were down 6.6 percent.
Daniel Ortwerth, analyst at Edward Jones in St. Louis, said the results came "down the middle of expectations."
 |
"It's just the reality of this business, and this uncertain, choppy, recovery, that we shouldn't be expecting very strong results yet," Ortwerth said.
UPS estimated 2009 capital expenditures at about $1.7 billion, some $500 million below its initial forecast. The company said it expected fourth-quarter earnings of 58 cents to 65 cents per share. Wall Street had expected 63 cents.
"We're confident that there is some recovery afoot, but we do see it as somewhat fragile," said chief financial officer Kurt Kuehn, in an interview.
Because they handle a large chunk of the consumer and commercial packages that crisscross the country each day, UPS and FedEx are regarded as bellwethers of the economy.
So far this year, UPS shares are up about 5 percent, trailing the 11 percent climb of the Dow Jones transportation average.
- Alternative energy's hot spot is making a comeback after some dark days in the past year.
- Athena Health is offering an electronic records and billing system to boost cash flow and simplify payments.
- The world’s two largest carbon emitters — the US and China — may have put a nail in the coffin of a global carbon reduction agreement.
- Every investor knows the connection between stocks and the dollar. But is there any method to the market's madness?
- NBA’s New Jersey Nets have yet to win a game this year. How can they get people to see them play?
- CNBC contributor David Pogue looks at a wireless speaker system designed to play music throughout your home.
Data is a real-time snapshot *Data is delayed at least 15 minutes