Courier giant UPS profits shrink by halfApril 24th, 2009 - 9:20 am ICT by IANS
New York, April 24 (IANS) The global recession has taken its toll on the United Parcel Service (UPS), with the world delivery leader reporting a 55 percent plunge in profits Thursday.
In a statement, Atlanta-based courier giant said its profit for the first quarter (January to March) of 2009 shrank to $401 million from $906 million during the same period last year - a drop of 55 percent. As the company reported a profit of just 40 cents per share - down from 87 cents a year ago, its shares slipped 6.5 percent to $51.21 Thursday.
The company’s revenue dropped more than 13 percent to $10.94 billion, compared to $12.68 billion during the same quarter last year. During the quarter, the company delivered 14.5 million packages daily worldwide - down 3.9 percent from a year ago.
“The continuing deterioration in global economic activity resulted in decreased revenue and profitability in all business segments,” the UPS said in a statement.
Despite the global slump, the company said, it has “managed its business effectively.” The UPS said it maintained its small package margins and expanded its market domestically and overseas while generating strong cash flow. UPS chairman and CEO Scott Davis said, “As economic activity deteriorated throughout the world during the quarter, we managed costs while maintaining our excellent service to our customers.”
He said, “We are optimistic about the company’s future. UPS is becoming an even leaner, more efficient enterprise, making many improvements that are sustainable when the economic climate strengthens.” During the quarter, the UPS has shed about 10,000 jobs in the US market to make its operations leaner.
The company says it is also cutting spending on strategic investments by an additional $200 million, bringing the total to just below $2 billion in 2009.
The UPS has operations in more than 200 countries around the world.
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