Tough Quarter for UPS, “Slight Improvements” Later

UPS announced a 22% decline in fourth-quarter adjusted diluted earnings per share, down from $1.07 for the same period in 2007. On a reported basis, diluted earnings per share were $0.25 and a loss of $2.52 for the fourth quarters of 2008 and 2007, respectively.

“Visibility into the future has become increasingly difficult given the enormous amount of economic uncertainty around the world,” said Kurt Kuehn, UPS chief financial officer. “Therefore, UPS will provide guidance only for the first quarter, which is earnings per share within a range of $0.52 and $0.68.

“The year will undoubtedly be one of the most difficult in UPS’s history,” Kuehn continued. “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.”

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