|UPS (NYSE:UPS) today pre-announced a 37% increase in adjusted diluted |
earnings per share for the first quarter of 2010. The results were powered
by a significant acceleration in the international package and supply chain
businesses and improved operating margins across all three segments.
Adjusted first quarter earnings totaled $0.71 per diluted share compared to an
adjusted $0.52 in the prior-year quarter. On a reported basis, diluted earnings per
share were $0.53 compared to $0.40 for the prior-year period, an improvement of
Consolidated revenue for the period grew 7%, driven by increases of 18% in
International Package and 14% in Supply Chain and Freight. International daily
volumes grew significantly with export up more than 9% and non-U.S. domestic
up over 24%. U.S. Domestic daily volume increased less than 1%, the first yearover-
year growth in more than two years.
"We expected the first quarter to be the most challenging of 2010 as the
economic recovery gathered steam through the year," said Kurt Kuehn, UPS's
chief financial officer. "As it turned out, revenue was stronger than we expected
due to international volume gains, increased yields in the U.S. and growth in
Forwarding and Logistics. Also, the operating leverage in our streamlined
network provided higher margins than anticipated."
As a result of the strong earnings for the first quarter and an improved outlook for
the remainder of the year, UPS has increased its expectations for full-year
adjusted diluted earnings to a range of $3.05 to $3.30 per share, a significant
increase over the $2.70 to $3.05 provided in February.
In the first quarter, UPS realized charges on two previously announced
events. First, UPS recorded a pre-tax $98 million restructuring charge related to
the reorganization of the U.S. package segment and second, a pre-tax $38
million loss on the sale of a specialized transportation business in its supply chain
unit in Germany. Additionally, the company recorded a $76 million non-cash
charge to income tax expense resulting from a change in the tax filing status of a
German subsidiary. These charges reduced net income by $175 million and
diluted earnings per share by $0.18.
UPS took an impairment charge, in the first quarter of 2009, on its DC-8 fleet
resulting in a non-cash expense of $181 million, which reduced net income by
$116 million, or $0.12 per share.