ATLANTA: UPS has reported a drop of 30.5 percent in 2014 pre-tax income to US$4.64 billion on a five percent increase in yearly revenue to US$ 58.23 billion.
Noting the company's financial results were "below our expectations" UPS CEO David Abney said annual net income was US$3.03 billion – down 30.2 percent compared to 2013.
"As we move into 2015, we will address this disparity with both cost and revenue actions," said Abney. "We will take actions necessary to improve profitability by increasing operational efficiency and adjusting price where appropriate."
For the year ended Dec. 31 2014, UPS generated US$3.4 billion in free cash flow; made after-tax contributions of US$800 million to company-sponsored pension plans; paid another US$1.5 billion to transfer some union employees to multiemployer healthcare plans; spent US$2.3 billion on capital equipment; paid dividends of US$2.4 billion; and repurchased more than 26 million shares for US$2.7 billion.
Citing higher than expected expenses during the fourth quarter peak season, UPS said it hired 100,000 temporary employees, delivered 572 million packages worldwide in December, and saw a 12 percent increase in both Cyber Monday and Peak Day deliveries.
"This year will be one of continuous improvement and advances in strategic initiatives that have great potential for the company," said Kurt Kuehn, UPS CFO. "E-commerce growth, operations technology implementation, emerging market expansion and industry specific solutions will provide momentum for UPS as we move throughout the year."
Kuehn said the company expects 2015 to produce earnings per share of US$5.05 to $5.30 - a 6.0 percent to 12 percent increase over 2014.