UPS Releases 1st Quarter Results

Revenue Gains Led by International, Supply Chain & Freight; U.S. Economic Conditions Drive Earnings Decline

April 23, 2008 - WMG Interactive

In 2007, first quarter adjusted earnings per share excluded an impairment charge related to aging jet aircraft and expenses for a voluntary separation program. Including these charges, diluted earnings per share for the first quarter of 2008 increased 11.5% over the $0.78 per share reported in the prior year.

For the three months ended March 31, 2008, consolidated revenue increased 6.5% to $12.7 billion while consolidated average daily volume remained flat at 15.1 million packages per day. Consolidated average revenue per piece increased 5.4%.

"U.S. economic activity deteriorated more rapidly than expected during the quarter," said Scott Davis, UPS chairman and CEO. "While we will be extremely vigilant with respect to costs in this difficult environment, we will not lose our focus on growing the business. We will continue to invest in the infrastructure, new products and services that will enable our customers to succeed in the global marketplace.

"UPS has successfully managed its operations through many economic cycles and we will do so again," Davis added.

Outlook
"We see no signs of economic strengthening in the second quarter," said Kurt Kuehn, UPS's chief financial officer. "As a result, the company expects earnings for the quarter in a range of $0.97 to $1.04 per diluted share compared to $1.04 for the second quarter of 2007."

Commenting on annual earnings guidance, Kuehn said, "Most forecasters are projecting that current anemic conditions will prevail for the remainder of the year. Therefore, we are reducing our 2008 earnings expectations to a range of $3.90 to $4.20 per diluted share.

"Despite the current state of the U.S. economy, the long-term growth fundamentals for our industry and for UPS are very favorable," Kuehn added. "Our international and supply chain businesses continue to offer great opportunity. In the U.S., we're positioning our small package business to weather this downturn and to be poised for economic recovery."