UPS Achieves Record Earnings Per Share

Discussion in 'UPS Pressroom News' started by cheryl, Jan 31, 2013.

  1. cheryl

    cheryl I started this. Staff Member

    2012 Free Cash Flow $5.4 Billion; Expects 2013 EPS growth 6-to-12%; $4 Billion in Share Repurchases

    UPS (NYSE: UPS) today announced record 2012 fourth quarter and full year adjusted diluted earnings per share of $1.32 and $4.53 respectively, with the U.S. Domestic segment leading the way. The company generated annual free cash flow of approximately $5.4 billion, a testament to operations execution and the emphasis UPS places on capital efficiency. UPS estimates that Hurricane Sandy reduced earnings per share by approximately $0.05.

    UPS recorded a fourth quarter mark-to-market, non-cash, after-tax charge of $3.0 billion for its company-sponsored pension and post-retirement benefit plans. Although the plans exceeded their expected rate of return, these incremental gains were more than offset by a 120 basis point decline in year-end discount rates. As a result, on a GAAP basis, diluted earnings per share for the quarter fell to a loss of $1.83. For the full year, reported diluted earnings per share were $0.83. This adjustment does not affect cash flow, required pension funding or benefits paid to plan participants.

    "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."

    UPS expects full year earnings per share to be within a range of $4.80 - $5.06, an increase of 6-to-12% compared to 2012 adjusted results. The company also raised guidance for 2013 share repurchases from $1.5 billion to $4.0 billion.

    Revenue in the Supply Chain & Freight segment increased $94 million or 4.0% compared with the fourth quarter of 2011. Adjusted operating profit was $172 million.

    As a result of the pension mark-to-market adjustment, the segment reported an operating loss of $541 million, on a U.S. GAAP basis.
    The Freight Forwarding unit experienced revenue improvement on strong tonnage increases in international air freight. Operating margin was negatively impacted by an increase in purchased transportation rates on Asia outbound freight during a period of accelerated demand in the market.

    The Distribution business unit achieved revenue growth of more than 10% as UPS continued to meet customers' needs for optimal supply chain management and value added services. Although operating margin was still strong, it declined due to investments in technology and new facilities to support the Healthcare and High Tech industries.

    UPS Freight revenue increased 6.2% with LTL gross weight hauled up 4.9% and LTL revenue per hundredweight up 1.5%.
    During the quarter, UPS launched an innovative ocean and air freight forwarding technology platform, UPS Order Watch, enhancing the UPS Supplier Management product with cloud-based capabilities that allow customers to more efficiently manage their international inbound supply chains.

    Outlook

    "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."
     
  2. InsideUPS

    InsideUPS Active Member

    Dear Mr. hall & Negotiatior$

    I hope you are reading thi$. ALL of u$ $hould $hare in the companie$ $ucce$$.


    Continued $upport and $olidarity in Negotiation$,

    InsideUPS
     
  3. brownIEman

    brownIEman Active Member

    Yes, Please read UPS' financials, especially the part about how UPS actually LOST $1.75 Billion in 2012 Q4. Of course, that did not hurt cash flow. We only lost money in the quarter because of $3B in one time charges to pension and wellfare funds. That money was borrowed, so cash flow was not hurt, just a mountain of long term debt added to the already mountain of long term debt. But no biggie, those were one time charges. Like the similar one time charges that happened at the end of 2010, begining of 2011, the $6B one time charge that happened in 2008. We have only had 5 or 6 similar one time charges in the past 5 or 6 years, so I am sure there will not be any more in the coming years. They are after all ONE time charges...
     
  4. oldngray

    oldngray nowhere special

    And oddly enough those one time charges seem to pop up right before contract time. Coincidence I'm sure.
     
  5. brownIEman

    brownIEman Active Member

    Your base premise is incorrect.

    2010, no contract in sight, 2011, no contract in sight, 2008 was as a result of the contract, it was right after.
     
  6. 1989

    1989 Well-Known Member

    Lets make it simple, no accounting tricks. Record earnings in 2012 and a 6-12% increased in forecast 2013...
     
  7. brownIEman

    brownIEman Active Member

    You cannot have it both ways. The record earnings in 2012 are a result of the accounting tricks. You take the accounting tricks out and you have a 4th quarter loss of 1.75 billioni dollars.
     
  8. Jackburton

    Jackburton Gone Fish'n

    It doesn't matter how we get there, just so long we get there - Management
     
  9. 1989

    1989 Well-Known Member

    No, you can't have it both ways...

    UPS (NYSE: UPS) today announced record 2012 fourth quarter and full year adjusted diluted earnings per share of $1.32 and $4.53 respectively, with the U.S. Domestic segment leading the way. The company generated annual free cash flow of approximately $5.4 billion, a testament to operations execution and the emphasis UPS places on capital efficiency. UPS estimates that Hurricane Sandy reduced earnings per share by approximately $0.05.

    the accounting trick is the one time charge which swings it to a loss. After the TNT deal went under there were whispers of a special divy with the 6 billion left over.
     
  10. I dont see any skinny supervisors or seeing them driving a 1972 Chevy Vega!!!
     
  11. brownIEman

    brownIEman Active Member

    No, the reality is that UPS paid a bill of over $3Billion in the 4th Quarter which would make that quarter a losing quarter. Instead of calling it a losing quarter, however, they borrowed the cash to pay the bill, which they will pay back over a long period, and called it a record quarter and year. That is an accounting trick. It would be like using your Visa to pay your mortgage bill and then saying "Wow, look how much money I cleared this month!". Not too much of a problem if you only do it once, if you make a habbit of it, you are going to get in trouble. UPS apears to be making a habbit of this sort of thing.Just to be clear on the TNT deal, there was not $6Billion in cash sitting around, the plan was to borrow the cash for about half of that deal as well.