UPS 3Q profit falls on charge; narrows forecast
NEW YORK — UPS says it's uncertain how strong the holiday shopping season will be, and that the pace of global growth remains uneven.
But the world's largest package delivery company managed to match Wall Street expectations for third quarter earnings, and shares rose slightly before the market opened Tuesday.
The company reported a drop in third-quarter earnings Tuesday, as declines in its U.S. package and freight business offset improving international operating profit. UPS' net income was hurt by a huge penalty to withdraw from a pension plan. Even without that big charge, net income eased — although it matched forecasts from Wall Street analysts.
"Our results were achieved in an environment of slowing global trade and changing market dynamics," said Scott Davis, UPS chairman and CEO.
The Atlanta company said it is able to better forecast its earnings for the year. It narrowed its outlook to a range of $4.55 to $4.65 per share, from an earlier forecast of $4.50 to $4.70.
Because UPS handles so many consumer and business shipments, it offers insight into the global economy and its pace of recovery.
In the most recent quarter, United Parcel Service Inc. earned $469 million, or 48 cents per share, compared with $1.07 billion, or $1.09 per share, a year earlier. Without the huge charge, it earned $1.03 billion, or $1.06 per share. Revenue fell less than 1 percent to $13.07 billion.
Analysts polled by FactSet expected a profit of $1.06 per share on revenue of $13.32 billion.
While operating profit declined at UPS' core US package segment, the international segment produced its highest-ever profit for the summer quarter. The domestic unit is more than double the size of international.
The company's stock price rose $1.04, or 1.45 percent, to $72.60 in premarket trading.
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