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UPS strike boxed in profits
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November 13, 1997: 8:59 p.m. ET
Bitter 15-day walkout led to third-quarter loss of $10 million
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ATLANTA (CNNfn) - United Parcel Service of America Inc. Thursday reported its first quarterly loss in five years, reflecting a bitter 15-day strike that crippled the package delivery firm's operations.
The Teamsters strike, the first nationwide job action in the company's 90-year history, contributed to a third quarter loss of $10 million versus a profit of $340 million in the same quarter last year.
Revenue tumbled 14 percent to $4.81 billion from $5.59 billion.
"The strike by the Teamsters union this summer was responsible for a swing of nearly $350 million in profits vs. last year's quarter and caused a lot of damage and hardship both to UPS people and our customers," UPS Chairman and Chief Executive Officer Jim Kelly said in a statement. "However our managers, drivers and all of our people are working very hard to rebuild our service and restore the confidence of our customers."
The quarterly loss for the three months ended in September was the first for UPS since 1992, when the adoption of accounting changes related to retiree medical benefits produced a loss for the first quarter.
Although the financial effect of the strike may continue into the future, the company said it believes the threat of a "significant long-term adverse impact on earnings has been substantially reduced based on recent operating results and continued cost-containment initiatives."
UPS said volume has not yet returned to pre-strike levels, but domestic revenues and operating profits for September climbed back to levels comparable to the same month a year ago.
For the nine months ended Sept. 30, UPS reported a profit of $558 million on revenues of $16.32 billion. That compared with a profit of $900 million on revenues of $16.43 billion for the nine months ended Sept. 30, 1996. 
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UPS
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