UPS announces lower 3Q earnings on higher revenue

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United Parcel Service announced today, Oct. 23, that it earned $970 million for the three-month period ended Sept. 30, down from $1.08 billion a year ago. Revenue was $13.11 billion, up from $12.20 billion a year ago.

The Atlanta-based company said its international and supply chain businesses demonstrated strength despite a challenging global economic environment. “UPS managed the business well in this very tough economic climate,” said Scott Davis, UPS chairman and chief executive officer. “We continue to see growth in our international and supply chain businesses while maintaining our focus on cost control and revenue management throughout our organization. UPS also is investing to ensure growth in the future so that the company will be even stronger when the global economy rebounds.”

For the nine-month period, UPS earned $2.75 billion compared to $3.02 billion during the same period last year. Revenue was $38.8 billion, up from $36.3 billion.

“We’ve taken steps to effectively manage our costs and enhance service levels in an environment that proved substantially worse than we initially anticipated, with significant slowing toward the end of the quarter,” said Kurt Kuehn, UPS chief financial officer. “Our focus on service, revenue management, cost reduction and our sound financial position will help us manage through these tough business conditions. We’ve implemented a range of initiatives to ensure our network operation matches demand.”

Kuehn said UPS reduced its 2008 capital expenditure budget by $200 million to $2.8 billion and expects to reduce 2009 capital expenditures as well. “Based on economic forecasts, we anticipate a challenging environment for a number of quarters going forward,” he said. “We believe the U.S. consumer will be very conservative with spending this year.”