UPS Profit Up 37%, in Line With Forecasts

United Parcel Service Inc. said earnings rose 37% in its first quarter as a publicly traded company, disappointing some investors who expected the world’s largest package delivery company to get a bigger boost from holiday-season shipments by online retailers.

UPS, which went public in November in the nation’s largest initial public offering, said its net income rose to $661 million, or 56 cents a share, in its fourth quarter from $482 million, or 43 cents, a year earlier. Revenue rose 12% to $7.45 billion. The earnings were in line with the 55-cent average forecast of analysts polled by First Call/Thomson Financial.

“We’re very happy with these results,” said Robert Clanin, UPS chief financial officer. “Our [domestic] ground volumes increased 4.6%, which we think is very healthy, especially when it’s coupled with 8% revenue growth.”

But some investors expected UPS to do better in package volume after reports that holiday sales on the Internet more than doubled to $7 billion, analysts said. UPS delivered 55% of the goods bought online during the 1998 holiday season.

Shares in Atlanta-based UPS fell $4.94 to close at $60 on the New York Stock Exchange, the lowest close since the shares were issued at $50 on Nov. 9.

At a Glance

* Airborne Freight Corp., parent of Airborne Express, said fourth-quarter profit tumbled 62% to $14.4 million, or 29 cents a share, as domestic shipments declined and fuel costs rose. The results exceeded the recently lowered average forecast of 26 cents. Revenue rose 1.9% to $805.9 million.

* Hershey Foods Corp. said fourth-quarter profit fell 8% to $98 million, or 70 cents a share, better than revised estimates, as sales declined 11% to $1.11 billion. The candy maker said that the computer problems that hurt Christmas sales are almost fixed and that sales are rebounding. It had warned in December that the computer problems would hurt profit, leading analysts to reduce earnings estimates by about 10 cents a share to an average 68 cents.

* Trans World Airlines Inc. said its fourth-quarter loss widened as higher wage costs and fuel prices weighed on the airline. TWA said its loss before special items widened to $111.7 million, or $1.60 a share, matching estimates, from a loss of $40.3 million, or 62 cents, a year ago. Revenue rose 7% to $801.7 million.

* Gannett Co. said fourth-quarter profit from continuing operations rose 14% to $284 million, or $1.01 a share, a penny better than estimates, as revenue grew 13% to $1.5 billion on higher ad revenue at USA Today.

* Tyson Foods Inc.’s profit rose 2% to $57 million, or 25 cents a share, in its fiscal first quarter, a penny better than analyst forecasts, as improved results in its hog business more than offset lower chicken prices. The nation’s largest poultry producer said sales declined 2.5% to $1.78 billion from a year ago.

* Union Carbide Corp. said fourth-quarter earnings more than tripled to $94 million, or 68 cents a share, from $24 million, or 18 cents, a year earlier, fueled by higher returns from its basic chemicals unit and strong performance from joint ventures. The results far exceeded analysts’ forecasts of 45 cents. Revenue jumped 20% to $1.55 billion.

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Reuters was used in compiling this report.