Pension Costs Send United Parcel to $2.78 Billion Q4 Loss; Adjusted Results and Forecast Miss the Mark (UPS)

Pension Costs Send United Parcel to $2.78 Billion Q4 Loss; Adjusted Results and Forecast Miss the Mark (UPS)


Package delivery giant United Parcel Service, Inc. (UPS) on Thursday posted disappointing fourth quarter earnings results, as pension costs and effects from Superstorm Sandy significantly cut into its bottom line.

The Atlanta-based company reported a fourth quarter net loss of $2.78 billion, or -$1.83 per share, compared with a profit of $1.2 billion, or 74 cents per share, in the year-ago period. Excluding a big one-time charge related to pension plans, UPS posted adjusted profits of $1.32 per share.

Revenue rose 2.8% from last year to $14.57 billion.

On average, Wall Street analysts expected a higher profit of $1.38 per share, albeit on smaller revenue of $14.48 billion.

Looking ahead, UPS said it expects full-year 2013 earnings to range from $4.80 to $5.06 per share, which would miss analysts’ outlook of $5.11 per share. In another announcement, the company disclosed plans to boost its 2013 share buyback program to $4 billion from a previous $1.5 billion.

UPS shares fell $1.23, or -1.5%, in premarket trading Thursday.

The Bottom Line
Shares of UPS currently offer a 2.81% dividend yield, based on last night’s closing price of $81.23 and the company’s annualized dividend payout of $2.28 per share.

United Parcel Service, Inc. (UPS) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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