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UPS profits fall
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October 18, 2001: 1:48 p.m. ET
No. 1 package-delivery company suffers drop in business post-attacks.
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NEW YORK (CNNmoney) - United Parcel Service Inc. saw third-quarter profits fall 19 percent from the year-ago period as business was curtailed after the Sept. 11 attacks, but the company managed to beat Wall Street estimates and its own lowered forecast.
UPS (UPS: down $0.70 to $50.07, Research, Estimates) said Thursday its net income for the quarter ended Sept. 30 was $568 million, or 50 cents per share, compared to $702 million, or 60 cents per share for the same period a year ago.
The Atlanta-based company said revenues rose 1.5 percent from the third quarter of 2000 to $7.5 billion.
Analysts surveyed by First Call on average expected the company to earn 46 cents per share on revenues of about $7.6 billion.
On Sept 28 UPS said it expected third-quarter earnings of 45 to 48 cents per share, rather than its previous guidance of 52 to 55 cents, due to a drop in shipments after the terrorist attacks.
The company's operating profit, before investment income, interest and taxes, was $932 million, down 17.4 percent from the year-ago period.
Don Broughton, analyst with A.G. Edwards and Sons, told CNNmoney UPS is doing an admirable job maintaining operating profit in a difficult time, but also noted there is a trend forming with Federal Express (FDX: down $1.21 to $37.80, Research, Estimates) outpacing UPS in revenue.
"Federal Express is outpacing UPS in volume and yield," Broughton said. "The purple team is beating the brown team."
For the fourth, UPS CFO Scott Davis said in a statement it "had become quite difficult to predict this year's holiday buying and shipping season and the prospects for any rapid economic turnaround."
The company is now forecasting fourth-quarter earnings in the range of 45 to 55 cents per share. First Call's consensus number for the fourth quarter is currently 52 cents per share.
"Prior to Sept. 11 UPS was showing growth in its domestic air business and was on track to deliver on the financial guidance we had provided, managing through some difficult economic conditions," Davis said.
"I don't think any of us expect a strong holiday shopping season," Broughton said. 
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