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.
The express giant saw fourth-quarter revenues increase by 4.6% year on year to $19.8bn, but operating profits were down 2.9% on last year to $2bn and net income declined by 58.7% to $453m. Included in the results are pension charges of $1.2bn.
The company said it had achieved its adjusted earnings per share target ($1.94).
Looking at its different business areas, US domestic package revenues were up 6.3% to $12.6bn and operating profits were down 8.1% to $999m.
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 21m 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% year on year to $3.8bn and operating profits were up 6.3% to 781m.
“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.”
Lastly, the supply chain and freight business reported a 0.7% increase in fourth quarter revenues to $3.4bn but operating profits were 7.1% behind a year earlier at £224m.
"Fourth quarter segment profitability was reduced by about $60m as a result of the UPS Freight contract ratification process (new bargaining agreement).
"Profitability for the other business units was positive, led by gains in forwarding. Revenue-quality improvements and a disciplined focus on cost containment further contributed to the positive results."
For the full year, total revenues reached $71.2bn, against $66.6bn last year, and net income was down 2.3% to $4.8bn. As well as the pension charges, the company also incurred transformation project costs of $360m during the year.
Read more express industry news
