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The world's largest package delivery company had
warned in late January that its profit would come in below its
forecast and market expectations. The Atlanta-based company had
put in place equipment and workers for an anticipated surge in
holiday packages that failed to materialize.
As a result of the poor quarter, UPS said it could raise prices
ahead of this year's peak season.
This was a second consecutive challenging peak season for UPS.
In 2013, the company was caught off-guard by a late rush of
online packages that left an estimated 1.3 million parcels
stranded on Christmas Eve.
UPS spent $500 million last year on network improvements and
worked closely with retail customers to prevent a repeat of what
happened late in 2013, but the rising popularity of e-commerce
made forecasting package volumes a moving target.
"As we move into 2015, we will address this disparity with both
cost and revenue actions," Chief Executive David Abney said of
the fourth-quarter cost overrun. "We will take actions necessary
to improve profitability by increasing operational efficiency
and adjusting price where appropriate."
UPS said it expected full-year 2015 earnings per share in a
range $5.05 to $5.30. Analysts expect $5.15 a share this year.
UPS reported net profit for the fourth quarter of $1.15 billion,
down nearly 2 percent from $1.17 billion a year earlier.
Earnings per share of $1.25 was unchanged from a year earlier
and met the expectation of analysts.
On a GAAP basis, the company reported adjusted earnings per
share of 49 cents thanks to pension-related charges.
In light premarket trading, UPS shares were down 0.6 percent at
$99.50.
(Reporting by Nick Carey; Editing by Bernadette Baum)
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