UPS profit tops estimates

 
City A.M. Reporter
United Parcel Service, the world's largest package delivery company, has reported a quarterly profit that beat estimates and forecast record-high profits in 2011.

UPS’ fourth-quarter adjusted operating profit rose to $1.08 (£0.67) per share, up 44 per cent from a year ago and topping the $1.05 per share expected by analysts.

The gain was three cents-per-share more when factoring in a gain from the sale of a logistics unit. Revenue rose to $13.42bn (£8.44bn) from $12.38bn.

US markets welcomed the news, boosting UPS shares by four per cent.

"In less than two years from the recession, they already think they can exceed peak earnings," said BB&T analyst Kevin Sterling.

UPS said revenue-per-piece shipped improved 3.5 per cent in the quarter, mainly through higher base pricing and fuel surcharges. Average daily package volume rose 1.7 per cent in the quarter as well.

On a conference call, UPS called the pricing environment "rational" and said rate increases imposed earlier this year have been "reasonably well received."

Atlanta-based UPS, which called for "moderate global growth in 2011," said it controlled costs as compensation and benefit expenses rose less than volume.

UPS handles goods equivalent to six per cent of US GDP and two per cent of global GDP in its trucks and planes, the company said. As a result, its shipment trends give a tangible picture of consumer demand.