UPS Inc. said its net income rose in the fourth quarter compared with a year earlier, but fell on an adjusted basis due to unexpected volume and inclement weather.
The parcel carrier’s profit was $1.2 billion, or $1.25 a share, compared with a loss of $1.7 billion, or $1.83, in the same quarter in 2012, UPS said Jan. 30. The year-ago quarter included a pension expense. After adjusting for the pension expense, net income a year ago was $1.3 billion, or $1.32 a share.
“As the retail market shifts to a direct-to-consumer model, more and more companies are leveraging UPS solutions,” UPS chairman and CEO Scott Davis said in a statement. “As a result, we experienced an unprecedented increase in volume, exceeding even our most optimistic plans.”
The earnings aligned with profit predictions UPS had announced earlier in January.
“The increased volume put a strain on our network, causing delays,” Scott said. “In response, UPS deployed additional people and equipment, placing a greater emphasis on service than cost.”
UPS is making the investments necessary to prevent similar issues in the future, Scott said.
Revenue increased slightly to $15 billion in the quarter, from $14.6 billion.
For the full year, UPS’ profit was $4.4 billion, or $4.61 a share, compared with $807 million, or 83 cents, the prior year. Adjusting for the pension expense and a penalty for terminating its attempted acquisition of Dutch parcel carrier TNT, profit was $4.3 billion, or $4.57 a share, a slight drop. Its total revenue grew to $55.4 billion, from $54.1 billion.
Operating profit in the Supply Chain and Freight segment was little changed in the fourth quarter at $171 million, on an adjusted basis. Revenue fell 5.8% due to freight forwarding declines.
For the full year, Supply Chain and Freight’s operating profit dropped 7.4% to $674 million, as revenue fell 2.3% to $8.9 billion.
UPS, based in Atlanta, is ranked No. 1 on the Transport Topics Top 100 listing of U.S. and Canadian for-hire carriers.