UPS Misses Earnings Estimates, Blames Hurricane Sandy

By admin on January 31, 2013

UPS earnings are out.

The global shipper reported earnings per share of $ 1.32 versus expectations of $ 1.38, blaming $ 0.05 of the difference on Hurricane Sandy.

Revenues were stronger than expected, coming in at $ 14.57 billion versus analysts’ consensus estimate of $ 14.43 billion.

The company says it sees 2013 earnings in the range of $ 4.80-5.06 per share. This is below analysts’ expectations of $ 5.13.

The stock is sinking in pre-market trading.

“2012 presented its challenges, most notably weak global trade. Nonetheless, UPS executed well, delivering superior service to customers,” said Scott Davis, UPS Chairman and CEO. “Despite modest macro growth expectations for 2013 and uncertainty in the U.S. caused by the lack of progress in Washington, the UPS business model will deliver consistent results, with operating profit growth in all segments.”

Below is a table from the UPS release showing package volume trends (the columns from left to right are Q4 2012, Q4 2011, the change between the two, and the percent change between the two):

Total U.S. domestic package volume was up 3.0 percent while total international package volume was up 2.2 percent.

Below is the the company’s outlook (from the release):

“UPS delivered its best ever adjusted earnings per share with strong free cash flow, even in the midst of weaker than expected global economic conditions in 2012,” said Kurt Kuehn, UPS chief financial officer. “Economic growth for 2013 is expected to be below long-term trends. Despite $ 350 million in headwinds from unfavorable foreign exchange comparisons and increased pension expense, UPS anticipates full year diluted earnings per share to increase 6% to 12% over 2012 adjusted results.

“Free cash flow remains a UPS hallmark, creating opportunities for significant distributions to shareholders,” Kuehn added. “Based on our strong financial position, UPS has increased expected share repurchases for 2013 from $ 1.5 billion to $ 4.0 billion.”

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