UPS reported a record $1.22 billion net profit in the fourth quarter that was 9.3 percent better than the same quarter the year before and came on healthy gains in U.S. domestic package demand and pricing.
UPS also raised its earnings outlook for 2012, saying profit improvement will outpace “modest improvement in the U.S.’ economy.”
The fourth-quarter profit, before including a change in pension accounting the company announced last week, brought UPS’s earnings for the full year to $4.2 billion, 20.8 percent better than the net profit in 2011.
The growth was especially strong in UPS's core U.S. parcel market, where the company saw a 3.8 percent improvement in domestic package volume in the fourth quarter over the same quarter a year ago and a 7.3 percent gain in revenue, to $8.6 billion. The biggest gain came in deferred air service — the cheaper alternative to overnight delivery — where volume grew 12.3 percent and revenue jumped 15.2 percent.
That domestic growth is most likely the result of broad trends toward e-commerce, which retail industry analysts say far outpaced sales growth in conventional stores during the 2011 holiday season.
That’s likely one reason UPS is raising its outlook for 2012. The carrier raised its profit guidance 9 percent to 15 percent over its previous projections
Overall revenue grew 5.6 percent in the fourth quarter to $14.17 billion. For the full year, UPS counted $53.1 billion in revenue last year, 7.2 percent better than 2010.
The company showed relatively firm pricing, with yield up 3.4 percent on domestic delivery services while growing 2 percent on international package operations.