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Saturday 23rd of January 2010
April 23, 2009    

UPS announces 55% fall in profits

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by Kay Murchie

The world’s biggest package delivery company, United Parcel Service (UPS), has announced a severe fall in profits for the first quarter as fewer parcels are being sent during the global economic downturn.

The group reported a 55% drop in profits for the period, compared with the same period in 2008, while revenue declined by 14% to $10.9 billion from $12.7 billion.

The results were well below analysts’ expectations with some describing them as “miserable”.

UPS, along with rival FedEx Corp, have always been seen as bellwethers of the US economy, but FedEx has also been hit by the weak economy and the company said it is to cut further jobs and reduce wages.

UPS said it is expecting the second quarter to be just as tough after chief financial officer Kurt Kuehn said: “Economic indicators tell us recovery in the United States might begin late this year, but more likely not until 2010“.

The company, based in Atlanta, said consolidated average daily volume totalled 14.5 million packages during the quarter, which represented a 4% decline compared to the same period last year.

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