UPS profit falls as global downturn hits revenue

The world's largest package delivery company reported first-quarter net income of $401 million, or 40 cents a share, compared with $906 million, or 87 cents a share, a year earlier.

Excluding an impairment charge for the early retirement of the company's fleet of DC-8 jets, UPS earned 52 cents per share in the quarter.

Analysts on average had expected earnings of 56 cents a share, according to Reuters Estimates.

Atlanta-based UPS said revenue fell to $10.94 billion from $12.68 billion. Analysts had expected $11.42 billion.

Like Memphis-based rival FedEx Corp , UPS has seen its U.S. and international business hit by the global recession. Last month, FedEx reported a 75 percent decrease in quarterly net profit.

Both companies are considered bellwethers because in a boom consumers ship more packages, but when the economy cools shipments wane.

In premarket trade, UPS shares were down more than 3 percent at $53.00

(Reporting by Nick Carey, editing by John Wallace)