UPS sees Q4 profit triples
UPS said it had fourth quarter net profit of $757 million, 198 percent more than the same 2008 period.
Revenue was $12.4 billion in the quarter, down 2.5 percent from the same period the prior year.
The company said the improvement was due in large measure to strong performance by its international segment, which saw growing volume, gain in operating profit and improved operating margin.
By segment, the company said revenues were:
' U.S. domestic package business down 5.5 percent to $7.55 billion.
' International package business up 5.8 percent to $2.79 billion.
' Supply chain and freight business down 1.8 percent to $2.03 billion.
Looking to the coming year, the company said it expects diluted earnings per share to increase of 17 percent to 32 percent over 2009 and that the first quarter would be the most challenging.
In its international business, UPS said it expects export volume growth to outperform the market. The supply chain and freight segment is projected to achieve a mid- to high-single-digit revenue growth rate for the year.
Scott Davis, chief executive officer, said in a telephone call with stock analysts that in the fourth quarter the company saw an end to declining inventories. He said with inventories low, the company thinks they have room to grow this year.
“It looks like this recession is finally over,” he said.
UPS said its international business out of Asia saw strong growth of more than 20 percent, stronger than the Asia-to-U.S. lane, although it said that trade also improved.
“There was an awful lot of technology demand both out of the U.S. and Europe in the fourth quarter,” said Davis. “Intra-Asia is an area that will continue to grow and outperform going forward.” UPS will benefit from a new Shenzhen hub in southern China that it expects to open this quarter.