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UPS Reports 37% Earnings Growth

The company, which provided an earnings preview two weeks ago, expects a strong year.
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said earnings rose 37%, a result of revenue improvement and increased operating leverage.

Excluding items, the company, which gave an earnings preview two weeks ago, said adjusted first-quarter earnings totaled $708 million, or 71 cents a share, compared with $517 million, or 52 cents, in the same quarter a year earlier. Revenue rose 7% to $11.7 billion.

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On a reported basis, UPS earned $503 million, or 53 cents a share, up from $401 million, or 40 cents a year earlier, as one-time charges reduced net income by $175 million.

"We expect first-quarter trends to continue through the year, producing revenue growth and additional operating leverage," said Chief Financial Officer Kurt Kuehn, in a prepared statement. Two weeks ago, UPS raised adjusted earnings guidance for the year to a range of $3.05 to $3.30 a share, an increase of 32% to 43% over adjusted 2009 results.

"With global economies showing signs of recovery and UPS's strong start to 2010, we are optimistic about this year and the future," said CEO Scott Davis.

During the quarter, consolidated volumes rose 3% to 940 million packages, and average revenue per piece also increased 3%, reflecting rate increases and higher fuel surcharges.

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UPS repurchased more than 4 million shares at a cost of $260 million. It ended the quarter with $3.1 billion in cash and marketable securities.

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