U.P.S. followed a stream of other big companies like Rockwell Automation and Northrop Grumman that were also weighed down by pension-related charges. A prolonged period of low interest rates is driving up companies’ pension costs.
Even factoring out the $3 billion noncash pension charge, U.P.S., the world’s largest package-delivery company, reported a fourth-quarter profit that still missed Wall Street’s expectations.
U.P.S. said it faced a $225 million rise in pension costs this year.
“This will be a significant drag in 2013,” the chief financial officer, Kurt Kuehn, told investors in a conference call.
The company expects earnings to rise 6 to 12 percent in 2013, from $4.80 to $5.06 a share, below the average Wall Street target of $5.11.
“It’s going to come down to worldwide economic growth,” said Helane Becker, a Dahlman Rose analyst.
U.P.S. posted a fourth-quarter net loss of $1.75 billion, or $1.83 a share, after the pension charge, in contrast to a net profit of $725 million, or 74 cents a share, in the period a year earlier.
Revenue rose 2.9 percent, to $14.57 billion from $14.17 billion. U.P.S. said costs related to Hurricane Sandy, which pounded the New York metropolitan area in late October, sliced profit by 5 cents a share in the quarter.
Factoring out one-time, noncash items, profit came to $1.32 a share, below the analysts’ average estimate of $1.38, according to Thomson Reuters.
“We remain in a cycle of mixed growth and mixed signals,” the chief executive, D. Scott Davis, told investors in the conference call. “Fiscal uncertainty continues to erode business confidence and growth prospects.”
A Morningstar analyst, Keith Schoonmaker, said one good sign in the quarter was the 7.7 percent rise in next-day air shipments in the United States.
“We need to cut through the pension clutter and look at economic results,” Mr. Schoonmaker said. “This is a company that has tremendous operating capability, so when you feed them a little bit more volume into their system, this company is able to make hay with that.”
U.P.S.’s largest American rival, FedEx, has been struggling with falling profits as customers increasingly send goods by ground, which is less costly and less profitable than by air.
Because of the huge volume of packages they handle each day, U.P.S. and FedEx are viewed as barometers of economic activity.
Shares of U.P.S. closed down $1.94, or 2.39 percent, at $79.29.
U.P.S. Posts a Loss and Forecasts Lower Profit
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U.P.S. Posts a Loss and Forecasts Lower Profit
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U.P.S. Posts a Loss and Forecasts Lower Profit
