UPS Profit Forecast for Year Tops Estimates as Shipping Demand Increases

Annual earnings, excluding some items, will be in the range of $4.75 to $5 a share, the Atlanta-based company said today in a statement. That topped the average estimate of $4.78 in a Bloomberg survey of 25 analysts.

UPS benefited from a surge in holiday shipping, carrying 480 million packages in the peak season from Thanksgiving to Christmas as its quarterly total reached 1.13 billion. UPS also raised prices and is expanding its hub in Cologne, Germany, as it takes advantage of emerging-market demand.iBrL_jOnpAoY

“Looking to 2012, our expectations are for mixed economic growth around the world, with modest improvement in the U.S.,” Chief Financial Officer Kurt Kuehn said in the statement.

The stock rose in early U.S. trading, climbing 1.1 percent to $77.01 at 8:33 a.m. in New York.

Fourth-quarter profit excluding the effect of pension expenses rose 17 percent to $1.25 billion, or $1.28 a share, from $1.07 billion, or $1.06, a year earlier. That compared with the average analyst estimate of $1.26 a share.

UPS said last week that because of a change in pension accounting, fourth-quarter adjusted earnings would be increased by 3 cents a share. The company took a pretax $827 million charge in 2011 as it accounted for pension gains and losses in the year incurred rather than amortizing them.

Volumes Jump

Volume rose last quarter for all product offerings except next-day air, which slid 1 percent, UPS said. Domestic deferred express shipments jumped 12 percent and ground shipping rose 3.5 percent, while international volume increased 2.6 percent.

UPS charged more revenue per piece in all categories, with average prices rising 2.9 percent to $10.31 a package.

Holiday shipping exceeded expectations by surpassing 25 million packages on five different days, including two days that topped 27 million, UPS said.

FedEx Corp. (FDX), operator of the world’s biggest cargo airline, last month reported fiscal second-quarter profit that beat estimates as U.S. consumers increased holiday orders from online retailers.





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