UPS results below expectations

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UPS has reported financial results below expectations for the fourth quarter as a result of higher than expected peak related expenses in its US domestic business.

Fourth quarter 2014 adjusted diluted earnings per share were $1.25, flat compared to the year before. On a GAAP basis, fourth quarter 2014 diluted earnings were $0.49 per share, compared to $1.25 in 2013.

“As we move into 2015, we will address this disparity with both cost and revenue actions,” said David Abney, UPS chief executive officer.

“We will take actions necessary to improve profitability by increasing operational efficiency and adjusting price where appropriate. Our growth strategy is sound and we reaffirm our long-term target of 9 per cent-to-13 per cent earnings per share growth.”

UPS delivered 1.3 billion packages during the fourth quarter, an increase of 8.1 per cent over the same period last year. For calendar year 2014, the company completed delivery of 4.6 billion packages, up 6.8 per cent over 2013.

For the fourth quarter, international revenue increased 5.9 per cent to $3.4bn on 4.3 per cent growth in daily package volume.

Supply chain and freight revenue increased 7.4 per cent to $2.5bn, driven by growth in Distribution and UPS Freight. Adjusted operating profit increased 4.7 per cent to $179m as improvements in Distribution and UPS Freight were offset by declines in the Forwarding unit.

US domestic parcels revenue rose 7.5 per cent to $10bn. Daily package volume increased 6.6 per cent with Deferred Air and Ground up 11 per cent and 7.1 per cent, respectively.

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