U.S. News

UPS Quarterly Profit Meets Forecasts, But 2007 Seen Falling Short


UPS said per share earnings rose nearly 10%, meeting expectations, but the package delivery company also issued a full year outlook for 2007 that fell short of analysts' forecasts.

The Atlanta-based company reported fourth-quarter net income of $1.13 billion, or $1.04 a share, compared with $1.05 billion, or 95 cents a share, a year earlier. The latest quarter's results matched an estimate compiled by Thomson Financial.

UPS said earnings were helped by fourth-quarter peak season retail sales and strong growth in its international business.

The world's largest package-delivery company said it expected full-year 2007 earnings per share to rise by 6% to 10%, or within a range of $4.10 to $4.25. This fell short of the $4.27 a share estimate compiled by Thomson Financial.

UPS reported fourth-quarter revenue of $12.6 billion, compared with $12 billion a year earlier. This was below the revenue analysts had predicted for the quarter of $12.85 billion, according to Reuters Estimates.

"UPS had a very good year in 2006," said Chairman and CEO Mike Eskew. "We posted new highs in revenue, operating profit and earnings per share. We finished the year with a well-executed peak season, and strong execution will continue to be critical for us as we move forward in 2007." 

UPS said its holiday peak season saw the number of packages rising, with 22 million packages shipped on two days.  It shipped more than 20 million packages on seven days, up from five days in 2005. Indeed, the company set a new record for package volume in 2006, delivering almost four billion packages or an average of 15.6 million per day. 

The company also said that revenue at its international business grew by nearly 10% percent to $2.44 billion from $2.22 billion a year earlier. It reported more than $1.7 billion in operating profit.

For the full year of 2006, revenue rose almost 12%; operating profit increased 8%, and earnings per share climbed 11.2% to $3.86.

UPS will host a conference call and webcast to discuss the quarter at 8:30 am.