United Parcel Service’s (UPS) net profit fell in the third quarter of 2012, as the U.S. delivery services giant cited a slowing global trade and changing market dynamics for the poor showing.
Atlanta-based UPS reported a profit of $469 million in the quarter, down 56 percent from $1.07 billion in the same period a year ago. Total revenue also dropped nearly 1 percent to $13.07 billion from $13.17 billion.
Because of an after-tax charge of $559 million, operating profit, which would have been $1.7 billion, slid to $770 million during the quarter. In August, the company announced a decision to restructure pension liabilities that led to the after-tax charge.
During the quarter, UPS delivered 15.5 million packages per day, a 2.9 percent increase over the prior-year period, the company said.
The international segment had its highest third quarter in history, generating $449 million in operating profit, up 7.7 percent over the prior-year period. But revenue declined 3.7 percent, as the impact from lower fuel surcharges and currency exceeded the benefit from the 1.2 percent growth in export volume.
For the first time in several quarters, Asia exhibited growth in export package volume, benefiting from product launches and easier comparisons, the company said.
Despite the profit contraction and global economic uncertainties, UPS takes a positive outlook on growth. “While there is some uncertainty around the magnitude of the holiday shopping season, we are confident in UPS’s ability to deliver,” said Kurt Kuehn, chief financial officer.
He added that for the full-year 2012, earnings are expected to be 5 percent to 7 percent higher than in 2011.
Photo: Kuba Bozanowski
