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United Parcel Service (UPS) stock rises despite sliding Q4 earnings

United Parcel Service (UPS) posted a 4.6% hike in total revenue of $19.85 billion in the fourth quarter of 2018 as it reported its results before the bell on Jan. 31. In the three-month period, the parcel giant earned just $0.52 per diluted share. Even though profit per share fell 59% year-on-year, it was still better than expectations — swiftly sending the stock up after the quarterly announcement.

The latest quarter included a “mark-to-market (MTM) non-cash, after-tax pension charge of $1.237 billion, which represents an after-tax charge of $1.42 per diluted share.”

“In the prior-year period, the company’s GAAP results included $0.40 per diluted share related to mark-to-market pension charges and benefits from the Tax Cuts and Jobs Act,” read the company statement.

UPS fourth quarter 2018 Earnings Infographic

Despite heavy expenses, the major operating statistics for UPS looked promising. Average daily package volume rose 3%, while average revenue per piece rose 4.1%. Both metrics saw growth in both US and international segments.

LOOKING FORWARD

UPS now expects total adjusted operating profit growth in the low-teens with all segments up double-digits in 2019. Including pension financing costs headwinds of about $325 million, the parcel giant now sees adjusted EPS at $7.45-7.75 per share.

 

 

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