UPS Offers High-End 2012 Guidance

ATLANTA (TheStreet) -- UPS(UPS) narrowly beat earnings estimates and offered current year guidance at the high end of estimates.

The overnight package company reported net income excluding items of $1.3 billion, or $1.28 a share. Analysts surveyed by Thomson Reuters had estimated $1.26. Revenue rose 6% to $14.2 billion. Analysts had estimated $14.5 billion.

With items, including a change to mark-to-market pension accounting, UPS earned $725 million, or 74 cents a share.

"UPS achieved record earnings per share in a volatile global operating environment where trends varied by region," said Chief Financial Officer Kurt Kuehn in a prepared statement.

Looking ahead, UPS guided towards full-year 2012 earnings of $4.75 to $5 a share, representing an increase of 9% to 15% over adjusted 2011 results. Analysts had been estimating $4.77 a share.

"Our expectations are for mixed economic growth around the world, with modest improvement in the U.S," Kuehn said. "However, UPS projects another strong year of earnings."

"Cash flow will remain strong, providing a platform for significant distributions to shareowners," Kuehn added. "In line with this, UPS anticipates $2.7 billion in share repurchases for the year."

During the quarter, UPS delivered 1.13 billion packages, up 3.6% from a year earlier. Adjusted operating margin expanded 140 basis points to 14.3%.

Domestic package revenue was $8.67 billion, with an adjusted operating margin of 15.2%, while international package revenue was $3.15 billion with an adjusted operating margin of 16%. Supply chain and freight revenue was $2.34 billion with an adjusted operating margin of 8.5%.

-- Written by Ted Reed in Charlotte, N.C.

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