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27th Jan 2005, 12:51
http://ups.com/pressroom/us/press_releases/press_release/0,0,4510,00.html
UPS 4th Quarter Shows 10% Revenue Gain
Press Release
Full-Year Earnings Up 15% As International Profits Exceed US$1 Billion
ATLANTA, Jan. 27, 2005 - UPS (NYSE:UPS) today reported a solid revenue gain of 10.2% in its fourth quarter and earnings of US$0.76 per diluted share, up 1.3% compared to the prior-year period. For the full year, revenue increased to a record US$36.6 billion while net income climbed 15%.
Consolidated revenue for the three months ended Dec. 31, 2004, rose to US$9.84 billion, with strong double-digit growth reported by the international and non-package segments and a 6.6% increase by the U.S. domestic segment.
Consolidated worldwide package volume for the fourth quarter rose 3.7% to 963 million, while consolidated average daily volume increased by 297,000 packages per day to 15.5 million. Growth was led by international export volume, up 13.5%, and U.S. Next Day AirŪ, which increased 4.1%. Ground volume within the U.S. grew at 1.5%.
?Our global small package business remains strong and 2004 was an excellent year,? said Scott Davis, UPS?s chief financial officer. ?UPS delivered almost 3.6 billion packages in 2004 - the most in our history - although we were disappointed with our U.S. ground volume growth in the fourth quarter. As a result, we will focus several new efforts in this area in the coming months.?
Adjusted diluted earnings per share were US$0.82 for the fourth quarter of 2004, up 17% over the adjusted US$0.70 for the prior-year period. Adjusted results for the fourth quarter of 2004 include a US$66 million benefit due to a lower than planned effective tax rate. Adjusted results for the quarter exclude several items, including a US$110 million pre-tax impairment charge related to aircraft; a US$63 million pre-tax charge to pension expense, and a net credit to income tax expense of US$43 million. Adjusted results for the fourth quarter of 2003 exclude a pre-tax gain of US$28 million on the redemption of long-term debt and a credit to income tax expense of US$39 million.
Our previous estimate of GAAP earnings for the 2004 fourth quarter of US$0.84 to US$0.87 per diluted share included higher net tax credits than were realized.
Highlights by segment for the fourth quarter included:
· International package revenue increased almost 23% to US$1.9 billion on a 13.5% gain in average daily export volume. Overall, international average daily package volume rose 5.6%. Asia export volume increased 34% with export volume out of China up 125%. Excluding the aircraft impairment charge, operating profit for the segment jumped 40% to US$337 million, completing a year in which the segment generated more than US$1 billion in operating profit for the first time ever. Adjusted operating margin increased 220 basis points to 18.1%.
· U.S. domestic package revenue grew 6.6% during the period to US$7.1 billion. Excluding the impact of the aircraft and pension charges, described above, operating profit rose 1% to US$919 million and the operating margin was 13%. Average daily ground volume in the U.S. grew 1.5% for the quarter. Total Next Day AirŪ volume grew strongly at 4.1%. Ground volume shipped through The UPS Store? jumped 20%. Yields remained strong, with an increase in revenue per piece of 3.2% for all U.S. domestic products.
· Revenue for the non-package segment increased 16.6% to US$880 million, including an 11.6% revenue gain for the UPS Supply Chain Solutions unit. Revenue growth for the segment was on track and hit its target for the year. UPS completed its acquisition of Menlo Worldwide Forwarding last month and will add time-definite guaranteed heavy air freight to its portfolio across the globe.
?We have a long-term strategy that uniquely positions us to capitalize on the growth of global commerce, and we?re taking steps now to address our domestic growth and cost issues,? Davis said. ?We are accelerating efforts to sell solutions to the mid-sized customer market that combine supply chain and small package capabilities. Our senior managers in the field will be devoting more time to these mid-sized customers. And we also plan to dramatically increase the number of customers who are technologically linked to UPS through electronic shipping systems.?
For the full year ended Dec. 31, 2004, consolidated revenue increased 9.2% to a record US$36.6 billion, while operating profit rose 12.2% to US$5 billion. Net income for the year totaled US$3.3 billion, up 15% compared to the US$2.9 billion reported in 2003. Results for 2004 include the aircraft impairment and pension charges noted previously, as well as several credits to income tax expense. Results for 2003 include an investment impairment charge; gains from the sale of Aviation Technologies and Mail Technologies; a gain on the redemption of long-term debt, and several credits to income tax expense.
Excluding the impact of the items noted above, operating profit for the full year rose 16.1% to US$5.2 billion; net income rose 19.1% to US$3.3 billion, and earnings per diluted share totaled US$2.90 in 2004 compared to US$2.44 in 2003.
Davis said the company is expecting a solid period of growth in 2005. The international segment should continue its exceptional performance with strong export volume growth. U.S. domestic volume should grow 2-to-3% for the year with improving operating margins. UPS Supply Chain Solutions will add more than US$1 billion in revenue as a result of the acquisition of Menlo Worldwide Forwarding, which should be slightly accretive to earnings this year.
Davis reiterated the company?s expectation that total earnings per share for 2005 will grow 13-to-17% over the adjusted US$2.90 reported for 2004. The CFO said UPS generated US$3.5 billion in free cash flow in 2004 and will continue to generate substantial positive cash flow in 2005.
For the first quarter, UPS is projecting diluted earnings per share in a range of US$0.70 to US$0.75 compared to the US$0.67 reported during the prior-year period.
?In 2004, we grew our ground business, we grew our air business, we grew our international business and we delivered more packages than ever before,? Davis concluded. ?We?re optimistic about 2005 and confident in our ability to continue producing the type of consistent earnings growth for which we?re known. Opportunities like the integration of Menlo Worldwide Forwarding, with another 400 sales personnel, and the agreement to take direct control of our international express operations in China, will help us to continue executing our global growth strategy.?
UPS is the world?s largest package delivery company and a global leader in supply chain services, offering an extensive range of options for synchronizing the movement of goods, information and funds. Headquartered in Atlanta, Ga., UPS serves more than 200 countries and territories worldwide. UPS's stock trades on the New York Stock Exchange (UPS) and the company can be found on the Web at UPS.com.
UPS 4th Quarter Shows 10% Revenue Gain
Press Release
Full-Year Earnings Up 15% As International Profits Exceed US$1 Billion
ATLANTA, Jan. 27, 2005 - UPS (NYSE:UPS) today reported a solid revenue gain of 10.2% in its fourth quarter and earnings of US$0.76 per diluted share, up 1.3% compared to the prior-year period. For the full year, revenue increased to a record US$36.6 billion while net income climbed 15%.
Consolidated revenue for the three months ended Dec. 31, 2004, rose to US$9.84 billion, with strong double-digit growth reported by the international and non-package segments and a 6.6% increase by the U.S. domestic segment.
Consolidated worldwide package volume for the fourth quarter rose 3.7% to 963 million, while consolidated average daily volume increased by 297,000 packages per day to 15.5 million. Growth was led by international export volume, up 13.5%, and U.S. Next Day AirŪ, which increased 4.1%. Ground volume within the U.S. grew at 1.5%.
?Our global small package business remains strong and 2004 was an excellent year,? said Scott Davis, UPS?s chief financial officer. ?UPS delivered almost 3.6 billion packages in 2004 - the most in our history - although we were disappointed with our U.S. ground volume growth in the fourth quarter. As a result, we will focus several new efforts in this area in the coming months.?
Adjusted diluted earnings per share were US$0.82 for the fourth quarter of 2004, up 17% over the adjusted US$0.70 for the prior-year period. Adjusted results for the fourth quarter of 2004 include a US$66 million benefit due to a lower than planned effective tax rate. Adjusted results for the quarter exclude several items, including a US$110 million pre-tax impairment charge related to aircraft; a US$63 million pre-tax charge to pension expense, and a net credit to income tax expense of US$43 million. Adjusted results for the fourth quarter of 2003 exclude a pre-tax gain of US$28 million on the redemption of long-term debt and a credit to income tax expense of US$39 million.
Our previous estimate of GAAP earnings for the 2004 fourth quarter of US$0.84 to US$0.87 per diluted share included higher net tax credits than were realized.
Highlights by segment for the fourth quarter included:
· International package revenue increased almost 23% to US$1.9 billion on a 13.5% gain in average daily export volume. Overall, international average daily package volume rose 5.6%. Asia export volume increased 34% with export volume out of China up 125%. Excluding the aircraft impairment charge, operating profit for the segment jumped 40% to US$337 million, completing a year in which the segment generated more than US$1 billion in operating profit for the first time ever. Adjusted operating margin increased 220 basis points to 18.1%.
· U.S. domestic package revenue grew 6.6% during the period to US$7.1 billion. Excluding the impact of the aircraft and pension charges, described above, operating profit rose 1% to US$919 million and the operating margin was 13%. Average daily ground volume in the U.S. grew 1.5% for the quarter. Total Next Day AirŪ volume grew strongly at 4.1%. Ground volume shipped through The UPS Store? jumped 20%. Yields remained strong, with an increase in revenue per piece of 3.2% for all U.S. domestic products.
· Revenue for the non-package segment increased 16.6% to US$880 million, including an 11.6% revenue gain for the UPS Supply Chain Solutions unit. Revenue growth for the segment was on track and hit its target for the year. UPS completed its acquisition of Menlo Worldwide Forwarding last month and will add time-definite guaranteed heavy air freight to its portfolio across the globe.
?We have a long-term strategy that uniquely positions us to capitalize on the growth of global commerce, and we?re taking steps now to address our domestic growth and cost issues,? Davis said. ?We are accelerating efforts to sell solutions to the mid-sized customer market that combine supply chain and small package capabilities. Our senior managers in the field will be devoting more time to these mid-sized customers. And we also plan to dramatically increase the number of customers who are technologically linked to UPS through electronic shipping systems.?
For the full year ended Dec. 31, 2004, consolidated revenue increased 9.2% to a record US$36.6 billion, while operating profit rose 12.2% to US$5 billion. Net income for the year totaled US$3.3 billion, up 15% compared to the US$2.9 billion reported in 2003. Results for 2004 include the aircraft impairment and pension charges noted previously, as well as several credits to income tax expense. Results for 2003 include an investment impairment charge; gains from the sale of Aviation Technologies and Mail Technologies; a gain on the redemption of long-term debt, and several credits to income tax expense.
Excluding the impact of the items noted above, operating profit for the full year rose 16.1% to US$5.2 billion; net income rose 19.1% to US$3.3 billion, and earnings per diluted share totaled US$2.90 in 2004 compared to US$2.44 in 2003.
Davis said the company is expecting a solid period of growth in 2005. The international segment should continue its exceptional performance with strong export volume growth. U.S. domestic volume should grow 2-to-3% for the year with improving operating margins. UPS Supply Chain Solutions will add more than US$1 billion in revenue as a result of the acquisition of Menlo Worldwide Forwarding, which should be slightly accretive to earnings this year.
Davis reiterated the company?s expectation that total earnings per share for 2005 will grow 13-to-17% over the adjusted US$2.90 reported for 2004. The CFO said UPS generated US$3.5 billion in free cash flow in 2004 and will continue to generate substantial positive cash flow in 2005.
For the first quarter, UPS is projecting diluted earnings per share in a range of US$0.70 to US$0.75 compared to the US$0.67 reported during the prior-year period.
?In 2004, we grew our ground business, we grew our air business, we grew our international business and we delivered more packages than ever before,? Davis concluded. ?We?re optimistic about 2005 and confident in our ability to continue producing the type of consistent earnings growth for which we?re known. Opportunities like the integration of Menlo Worldwide Forwarding, with another 400 sales personnel, and the agreement to take direct control of our international express operations in China, will help us to continue executing our global growth strategy.?
UPS is the world?s largest package delivery company and a global leader in supply chain services, offering an extensive range of options for synchronizing the movement of goods, information and funds. Headquartered in Atlanta, Ga., UPS serves more than 200 countries and territories worldwide. UPS's stock trades on the New York Stock Exchange (UPS) and the company can be found on the Web at UPS.com.