So tomorrow is reporting day. here is an article I found from February 2009 with analyzing.
Curious to see tomorrow how bad the report will really be.
UPS hit by global slump
Shipping giant to freeze management salaries, suspend 401(k) match
By RACHEL TOBIN RAMOS
The Atlanta Journal-Constitution
Tuesday, February 03, 2009
The recession cut into earnings at shipping giant UPS in the fourth quarter, and the company said Tuesday that 2009 “will undoubtedly be one of the most difficult” in its history.
Although it remains solidly profitable, Sandy Springs-based UPS also became the latest corporation to announce it will suspend matches for employees’ 401(k) contributions. In addition, it is freezing management salaries.
“What a difference a year makes,” Chief Executive Scott Davis told analysts in an earnings conference call. “A year ago, we were optimistic about our prospects. Very few saw what was about unfold.”
He said 2009 is very hard to predict, prompting the company to look at “everything” for cost cuts. So far, it’s found about $500 million in savings, he said.
Fourth-quarter profit rose to $254 million, or 25 cents a share, including $575 million in charges related to freight operations. Excluding the charge, net profit was $829 million, or 83 cents a share.
In the same period of 2007 UPS posted a loss of $2.64 billion, due to a $6.1 billion write-off in relation to withdrawing UPS employee pensions from the Central States Pension Plan.
For comparison purposes, on an adjusted basis, fourth quarter 2008 profit was down 22 percent from a year ago, UPS said.
Total revenue for the period slid 5.2 percent to $12.7 billion, as average daily volume worldwide dropped 2.3 percent.
Earnings for the full year were $3.50 a share, within the range the company provided at mid-year but about 3 cents shy of Wall Street analysts’ expectations.
Davis, in the conference call, said analysts and investors should keep in mind UPS’s brand power and history of emerging strong from recessions.
“I want to remind you that we’re a great company that’s just operating in a bad economy right now,” he said. “Great companies do weather the storm and they come out stronger. What it comes down to is the strength of our balance sheet, the power of our brand.”
Wall Street seemed to agree, boosting UPS shares by more than 6 percent in late-morning trading Tuesday.
Plummeting oil prices provided one bright spot in the fourth quarter report, with fuel costs falling nearly 13 percent to $808 million. But full-year fuel costs rose 39 percent to $4.13 billion.
While suspending the 401(k) match, UPS said it is not making any changes to its longstanding defined benefit pension plan.
U.S. volume decreased in the fourth quarter by 4.4 percent with ground volume down 3.7 percent and Next Day Air declining 10.1 percent.
UPS is only offering guidance for the first quarter of 2009, projecting per-share earnings of 52 to 68 cents.
“Since economists do not expect any meaningful recovery until 2010, earnings in 2009 will suffer. Lower volume levels and reductions in package weight will put further pressure on margins. We anticipate the first quarter will be weak, with slight improvements later in the year as initiatives take hold,” Chief Financial Officer Kurt Kuehn said.
“The year will undoubtedly be one of the most difficult in UPS’s history,” he added.
Curious to see tomorrow how bad the report will really be.
UPS hit by global slump
Shipping giant to freeze management salaries, suspend 401(k) match
By RACHEL TOBIN RAMOS
The Atlanta Journal-Constitution
Tuesday, February 03, 2009
The recession cut into earnings at shipping giant UPS in the fourth quarter, and the company said Tuesday that 2009 “will undoubtedly be one of the most difficult” in its history.
Although it remains solidly profitable, Sandy Springs-based UPS also became the latest corporation to announce it will suspend matches for employees’ 401(k) contributions. In addition, it is freezing management salaries.
“What a difference a year makes,” Chief Executive Scott Davis told analysts in an earnings conference call. “A year ago, we were optimistic about our prospects. Very few saw what was about unfold.”
He said 2009 is very hard to predict, prompting the company to look at “everything” for cost cuts. So far, it’s found about $500 million in savings, he said.
Fourth-quarter profit rose to $254 million, or 25 cents a share, including $575 million in charges related to freight operations. Excluding the charge, net profit was $829 million, or 83 cents a share.
In the same period of 2007 UPS posted a loss of $2.64 billion, due to a $6.1 billion write-off in relation to withdrawing UPS employee pensions from the Central States Pension Plan.
For comparison purposes, on an adjusted basis, fourth quarter 2008 profit was down 22 percent from a year ago, UPS said.
Total revenue for the period slid 5.2 percent to $12.7 billion, as average daily volume worldwide dropped 2.3 percent.
Earnings for the full year were $3.50 a share, within the range the company provided at mid-year but about 3 cents shy of Wall Street analysts’ expectations.
Davis, in the conference call, said analysts and investors should keep in mind UPS’s brand power and history of emerging strong from recessions.
“I want to remind you that we’re a great company that’s just operating in a bad economy right now,” he said. “Great companies do weather the storm and they come out stronger. What it comes down to is the strength of our balance sheet, the power of our brand.”
Wall Street seemed to agree, boosting UPS shares by more than 6 percent in late-morning trading Tuesday.
Plummeting oil prices provided one bright spot in the fourth quarter report, with fuel costs falling nearly 13 percent to $808 million. But full-year fuel costs rose 39 percent to $4.13 billion.
While suspending the 401(k) match, UPS said it is not making any changes to its longstanding defined benefit pension plan.
U.S. volume decreased in the fourth quarter by 4.4 percent with ground volume down 3.7 percent and Next Day Air declining 10.1 percent.
UPS is only offering guidance for the first quarter of 2009, projecting per-share earnings of 52 to 68 cents.
“Since economists do not expect any meaningful recovery until 2010, earnings in 2009 will suffer. Lower volume levels and reductions in package weight will put further pressure on margins. We anticipate the first quarter will be weak, with slight improvements later in the year as initiatives take hold,” Chief Financial Officer Kurt Kuehn said.
“The year will undoubtedly be one of the most difficult in UPS’s history,” he added.
: am not going to accept his UPS financial opinions as final word.