UPS BEATS ANALYSTSÆ PREDICTIONS DESPITE 12% DROP IN INCOME
United Parcel Service Inc. said Tuesday that, despite a 12-percent drop in fourth quarter net income, to $645 million or 57 cents a share, the express giant out-performed Wall Street analysts expectations of 46 to 55 cents a share.
Atlanta-based UPS credited continued international growth and a strong end to the holiday shipping season for offsetting analysts' dismal predictions.
UPS's fourth quarter revenues totaled $8.1 billion, up 2.4 percent over the year-earlier period. Consolidated operating profit fell 9.5 percent to $1 billion.
'Our cost controls remained highly effective and served to mitigate the effects of the U.S. slowdown, even as we continued to effectively position UPS for the coming economic rebound,' said Scott Davis, UPS's chief financial officer. 'During the quarter, our international operations resumed its growth and profitability and the logistics and freight segments also posted gains.'
UPS's fourth-quarter international export volume rose 8 percent overall, led by a 15-percent gain in European exports. Asian exports improved 7 percent.
Holiday shipping was boosted by gains in electronic commerce shipping, and the company saw significant gains in residential air deliveries and UPS's various e-returns products.
U.S. package business revenue totaled $6.2 billion for the quarter, down 1.7 percent. International revenues rose 3.2 percent to $1.1 billion, while non-package revenues jumped 54.8 percent to $746 million, reflecting the contributions of several acquisitions.
Quarterly results were aided by a $24-million reduction in tax expense, due to a lower-than-expected tax rate. The company also was aided by $37 million from the Airline Stabilization Act.
For 2001, net income slipped to $2.4 billion, from $2.9 billion, on revenue of $30.6 billion, down 2.9 percent. Operating profit fell 12.2 percent to $4 billion. Including adjustments for non-recurring items, net income was $2.43 billion, down 13.2 percent.
Davis said UPS’s capital expenditures in 2002 will total less than $2 billion, instead of the $2.4 billion spent in 2001. While curbs on spending will affect UPS’s facilities, vehicles and aircraft, information technology projects will continue.
While global economic environment makes short-term predictions difficult, Davis said UPS anticipated first-quarter earnings of 40 to 47 cents per share.