UPS (UPS), the world's biggest shipping company, said fourth-quarter net income nearly tripled from a year ago, as brisk holiday business and lower costs more than offset a decline in revenue.Like rival FedEx (FDX), UPS, also known as United Parcel Service, is finely attuned to economic activity -- that's what happens when you deliver 15 million packages every business day -- so it's something of a relief that the company beat Wall Street's estimate and issued an in-line full-year outlook. But the company did update its forecast in early January, which made the analysts' jobs much easier.
For the three months that ended Dec. 31, the Atlanta-based company said net income rose to $757 million, or 75 cents a share, from $254 million, or 25 cents, a year ago. Earnings came in a penny ahead of analysts' average view, according to Thomson Reuters. On Jan. 8, Big Brown raised its fourth-quarter outlook, saying earnings would come in at 73 cents to 75 cents a share, up from a prior range of 58 cents to 65 cents.
Revenue fell 2.5% to $12.38 billion from $12.70 billion in last year's fourth quarter, but that beat the Street's forecast for revenue of $12.25 billion.
"Economic forecasts indicate gradual improvement as 2010 unfolds," said Kurt Kuehn, UPS's chief financial officer, in a statement. "The first quarter will be the most challenging of the year for UPS with profitability only slightly better than last year."
In December, FedEx reported fiscal second-quarter earnings that beat the Street by four cents a share and said the economy had "reached a turning point."
For fiscal 2009, UPS said net income fell 28% to $2.15 billion, or $2.14 a share, down from $3 billion, or $2.94. Revenue declined 12% to $45.30 billion from $51.49 billion. Looking ahead, UPS forecast fiscal 2010 earnings in a range of $2.70 to $3.05 a share, which is in line with analysts' forecast of $2.81.