UPS Forecasts Profits In Excess Of Estimates

The World’s largest parcel delivery company UPS, has forecast a 2012 profit that has exceeded analysts’ estimates as the global demand for shipping rises.

Its annual earnings, with the exception of a few excluded items, will be between $4.75 to $5 a share, UPS said in a statement just issued. This estimate is above the average estimate of $4.78 provided by 25 analysts surveyed by Bloomberg.

The parcel giant has greatly benefited from a surge in shipping over the festive season, indeed UPS carried 480m parcels in the peak season from Thanksgiving to Christmas, with its quarterly total hitting 1.13 billion. The company has also raised prices and is expanding its parcel hub in Cologne, Germany, taking advantage of demand in emerging markets.

They also believe that economic growth in Asia will outpace the rest of the World, even as the economic pace slows down in some parts of Asia.

They also cite the current US economy as being better than they would have thought back in August and September last year when there was talk of a double dip recession.

UPS Chief Executive Officer Scott Davis said, “We don’t hear that anymore,” and commented further that, “The U.S., while I wouldn’t call it a robust economy, the small package business is performing better than we would have thought four or five months ago.”

UPS stock has bounced back up with shares touching $76.93 last week, the highest intraday trading price in eleven months.

For 2012, UPS have a domestic forecast of overall parcel volume gains of 2 to 3%, whilst they believe there will be little change to international domestic volumes, but that international exports will rise 5 to 6%.

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Author: Richard Allen