UPS profit falls as global downturn hits revenue

23 April 2009 @ 08:16 am EDT

U.S. economic bellwether United Parcel Service Inc reported lower-than-expected quarterly earnings on Thursday, saying the global downturn had taken a bite out of revenue and profitability as fewer businesses and consumers sent packages.

United Parcel Service aircrafts are loaded with containers of packages bound for their final destination at the UPS Worldport All Points International Hub during peak delivery day in Louisville, Kentucky in this December 19, 2007 file photo.

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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)