UPS third quarter profit rises

Source: Supply Chain Digital

Date :10/24/2007 5:39:02 AM

UPS' growth in the fourth quarter, which includes the Thanksgiving and Christmas holidays, will be its slowest in four years.

This is due mostly to weak U.S. retail sales, the world's largest shipping carrier said Tuesday.

In particular, the Atlanta-based company expects to deliver more than 22 million packages on its peak shipping day of Dec. 19, which would be flat with last year's peak day, spokesman Norman Black said.

The news came as UPS reported a 3.7 percent increase in third-quarter profit on a modest rise in sales.

Growth halt

While it said its earnings projection for the year will be in line with previous projections, the company said it expects slowing retail sales will restrain U.S. domestic volume growth.

Analysts were mostly positive, as the latest quarter's results, when one-time items are excluded, beat Wall Street expectations. Company shares rose 55 cents to close at $75.64 Tuesday.

UPS, also known as United Parcel Service Inc., earned $1.08 billion, or $1.02 a share, for the three months ended Sept. 30, up from $1.04 billion, or 96 cents a share, for the same period a year earlier.

Excluding a one-time charge related to the restructuring and disposal of certain operations in France within its supply chain and freight segment, UPS said it earned $1.11 billion, or $1.05 a share, in the third quarter.

Revenue in the quarter rose 4.7 percent to $12.21 billion, from $11.66 billion recorded in the same period a year ago.

For the first nine months of the year, UPS said it earned $3.02 billion, or $2.84 a share, down from $3.07 billion, or $2.82 a share, a year earlier. Nine-month revenue rose 4 percent to $36.30 billion from $34.92 billion a year earlier.

For the full year, it expects adjusted diluted earnings per share to be $4.13 to $4.19, within the range it provided at the beginning of 2007.

Retirement

Earlier this month, UPS said that Chief Executive Mike Eskew will retire at the end of the year after six years at the helm and more than three decades with the company.

Davis will replace Eskew. The move was not much of a surprise, although Eskew, 58, had not said previously when he would step down.

Eskew said Tuesday he was pleased with the third-quarter's results and is confident in the company's future.

"Clearly, we're headed in the right direction," Eskew said.

October 24, 2007

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