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missed estimates Thursday, as its first-quarter net income fell 43%, and the company said it doesn't expect an economic recovery to begin until 2010.

Excluding items, the package carrier reported earnings of $517 million, or 52 cents a share. Analysts surveyed by Thomson Reuters had estimated 56 cents. Revenue fell $13.7% to $10.9 billion and missed expectations of $11.4 billion. In the same period a year earlier, UPS earned $906 million, or 87 cents a share.

The per-share earnings exclude an impairment charge of 12 cents related to the earlier-than-expected retirement of aging aircraft, as UPS moved to set aside its entire fleet of 44 DC-8 aircraft. Including this noncash charge, the company earned 40 cents a share.

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Looking ahead, "economic indicators tell us recovery in the U.S. might begin late this year, but more likely not until 2010," said CFO Kurt Kuehn, in a prepared statement. "So we expect the second quarter will be another difficult one." As a result, UPS anticipates second-quarter earnings of 45 cents to 55 cents a share. Analysts had been estimating 65 cents.

The company said that "continuing deterioration in global economic activity resulted in decreased revenue and profitability in all business segments." Consolidated average daily volume fell 3.9% to 14.54 million packages, down from 15.13 million a year earlier. Average revenue per piece declined 6.9%, reflecting changes in product mix, lower fuel surcharges and weight per package, and negative currency impacts.

UPS will scale back its 2009 capital spending by an additional $200 million, bringing the total to just below $2 billion.