Improved Economic Situation Brings UPS’s Q4 Profit Up by 40 Per Cent

Added by Gary Dunn on February 2, 2011

The United Parcel Service (UPS) could report on Tuesday an increase in profit of 40 per cent in Q4, according to Wall Street estimations. However, the boost in profit could be lower since the hard winter and high costs for fuel have taken their toll on customers’ wallets.

Because of the higher fuel costs and the winter storms seen this year in the United States, analysts said that the slowed the increase for holiday sales. Last year, UPS estimated a boost of 7.5 per cent, during the time period with most shipments, between Thanksgiving and Christmas.

BB&T analyst Kevin Sterling said that pricing and improved efficiency were the factors which helped boost UPS’s profit in the fourth quarter. Nonetheless, the analyst believes that the service company’s profit was, as well, influenced by weather and fuel price.

The United Parcel Service is the biggest package delivery company in the world, and, according to its reports, it handled 6 per cent of the United States gross domestic product (GDP) and no less than 2 per cent of the global GDP through its planes and trucks.

Last Friday, data provided by the government indicated that customer spending has increased considerably, as compared to the last four years, and that consistent exports have helped the economic expansion in Q4.