UPS revenues up 4.6pc but pension charges drag down net profit in Q4
EXPRESS giant UPS saw revenues increase during the fourth quarter on the back of 'record shipments' but its profits took a hit as a result of pension charges
EXPRESS giant UPS saw revenues increase during the fourth quarter on the back of 'record shipments' but its profits took a hit as a result of pension charges.
Fourth-quarter revenues increased by 4.6 per cent year on year to US$19.8 billion, but operating profits were down 2.9 per cent on last year to $2 billion and net income declined by 58.7 per cent to $453 million. Included in the results are pension charges of $1.2 billion, reports London's Air Cargo News.
Looking at its different business areas, US domestic package revenues were up 6.3 per cent to $12.6 billion and operating profits were down 8.1 per cent to $999 million.
Operating profit was reduced by planned pension expense, start-up costs for several large facilities, and one less operating day than in the prior year's fourth quarter.
The company said of its domestic performance: 'The segment benefited from UPS's Transformation initiatives, new network capabilities and higher-quality revenue during the period.
'The US Domestic segment delivered more than 21 million packages, on average, per day with strong revenue yields and record on-time performance. Shipment growth was balanced, as business-to-business and business-to-consumer packages grew in the quarter.'
International package saw fourth quarter revenues increase by 2.9 per cent year on year to $3.8 billion and operating profits were up 6.3 per cent to $781 million.
'Our International segment produced record results highlighted by double-digit profitability in Europe,' said David Abney, UPS chairman and chief executive.
'Our broad portfolio, diverse revenue base and flexible network help buffer the impacts of global economic softening. These strengths also position UPS to help customers navigate the current complexities of global trade.'
The supply chain and freight business reported a 0.7 per cent increase in fourth quarter revenues to $3.4 billion.
For the full year, total revenues reached $71.2 billion, against $66.6 billion last year, and net income was down 2.3 per cent to $4.8 billion. As well as the pension charges, the company also incurred transformation project costs of $360 million during the year.