UPS 4Q profit of $1.33 billion beats Wall Street forecasts

AP News
Posted: Feb 02, 2016 10:16 AM
UPS 4Q profit of $1.33 billion beats Wall Street forecasts

DALLAS (AP) — UPS nearly tripled its fourth-quarter profit and seemed to avoid many of the holiday package-delivery breakdowns that it suffered a year earlier.

The company said that through greater use of automation and working with retailers, it was able to smooth out some of the spikes that overwhelmed its network in late 2014.

UPS expects 2016 earnings of between $5.70 and $5.90 per share, which would be an increase of between 5 percent and 9 percent over 2015 and stronger than Wall Street expected. Analysts were forecasting $5.72 per share in 2016, according to a FactSet survey.

Still, company executives said they face mixed economic indicators and slowing growth in some emerging economies.

United Parcel Service Inc. earned $1.33 billion, up from $453 million a year earlier, when results were hurt by a $692 million charge for pension and health care costs.

Company executives said the peak holiday season was a success. UPS used pricing to encourage retailers to shift some shipments to slower days such as weekends and reduce the volume on the busiest days. They said that avoided the surges that overwhelmed the UPS network during the 2014 holidays.

UPS said it delivered 1.3 billion packages in the fourth quarter, an increase of 2 percent over late 2014.

Myron Gray, president of UPS' U.S. operations, said to handle the load the company hired 90,000 to 95,000 seasonal workers, just as it expected. But because of automation, UPS was able to delay some of the hiring until the workers were needed, and hours worked fell 8 percent from a year earlier, he said.

"We don't see a need to add head count" or more employees, he added during a conference call with analysts.

The Atlanta company said Tuesday that profit worked out to $1.48 per share. Excluding one-time costs including a charge for pension returns that were lower than expected, earnings would have been $1.57 per share, which is 16 cents better than industry analysts had projected, according to a poll by Zacks Investment Research.

Banning Straws
John Stossel

However, the company's fourth-quarter revenue of $16.05 billion was short of $16.27 billion that Wall Street had expected. UPS cited the strong dollar and falling energy prices, which means that the company did not log the same fuel surcharges it had last year.

In morning trading, UPS shares rose $1.53 to $95.61. They began the day down 2 percent since the beginning of the year, compared with a 5 percent drop in the Standard & Poor's 500 index.


Elements of this story were generated by Automated Insights ( using data from Zacks Investment Research. Access a Zacks stock report on UPS at


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