UPS Revenue Rises, but Earnings Forecast Underwhelms
Revenue boosted by holiday-season deliveries, but lower margins hurt results
The Atlanta-based company also gave a downbeat outlook for fiscal 2017, forecasting earnings of $5.80 to $6.10 per share, below the $6.17 expected by analysts polled by Thomson Reuters.
Shares fell 4% to $112.25 during premarket trading on Tuesday. The stock had risen 23% over the past three months through Monday’s close.
Chief Financial Officer Richard Peretz said a shift in product mix and weak industrial production have hurt the company’s profit.
After forecasting record holiday season deliveries, UPS delivered 1.4 billion packages during the quarter, up 7.1% from the prior year.
Sales for its domestic segment grew 6.3% to $10.91 billion, while sales in its much smaller international and supply chain segments each grew 5% and 2.6%.
In all for the quarter UPS reported a loss $239 million, or 27 cents a share, compared with a profit of $1.33 billion, or $1.48 a share, a year earlier.
Excluding items such as a mark-to-market pension charge, earnings rose to $1.63 a share from $1.57. The most-recent quarter included mark-to-market expenses of $1.67 billion, while the charges for the year-earlier quarter totaled $79 million.
Revenue grew 5.5% to $16.93 billion. On an adjusted basis, the company said revenue was $16.99 billion.
Analysts had forecast earnings of $1.69 on $17.01 billion in revenue.
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