United Parcel Service(UPS) reported on Thursday a quarterly profit that missed analysts’ estimates and forecast no quick turnaround as the global economic downturn continued to take its toll on the world’s largest package-delivery company.
UPS’s quarterly operating profit fell by more than half over the year, dropping to $718m in the first quarter of 2009 from $1.49bn a year earlier.
UPS earnings fell more than 55 percent to $401 million as revenue dropped more than 13 percent, compared to profit of $906 million a year ago.
The results missed Wall Street expectations, and UPS provided an outlook for second-quarter earnings that was below analysts expectations.
The January-March profit was 40 cents a share, compared to year-ago earnings of 87 cents a share.
Revenue in the quarter was $10.94 billion, versus $12.68 billion a year ago.
Adjusted earnings were 52 cents a share. Analysts polled by Thomson Reuters, on average, expected UPS to earn 56 cents per share on revenue of $11.4 billion for the first quarter. Analysts generally exclude one-time items from their estimates.
For the three months ended March 31, consolidated average daily volume totaled 14.5 million packages, a 3.9 percent decline compared to a year ago. Average revenue per piece decreased 6.9 percent, reflecting changes in product mix, declining fuel surcharges and weight per package and the negative impact of currency.
The company's international segment was affected in the quarter as well, posting a 1 percent volume decline with some benefit from the timing of Easter. The 15.3 percent decline in revenue per piece reflected similar negative trends as in the U.S. small package operation as well as the negative impact of currency, UPS said.
UPS said that the second quarter will be difficult. The company expects earnings per share in a range of 45 cents to 55 cents. Analysts were expecting second-quarter earnings of 65 cents.
"Economic indicators tell us recovery in the U.S. might begin late this year, but more likely not until 2010," Chief Financial Office Kurt Kuehn said in a statement.
In premarket trading UPS shares fell 92 cents to $53.83.
Disclosure I am long UPS shares.