Despite increased revenue and freight volume, parcel delivery and trucking company UPS Inc. on Tuesday reported a loss in the fourth quarter of 2016.

The net loss of $239 million, or 27 cents per share, compares to net income of $1.3 billion, or $1.48 per share, in the final three months of 2015. Total revenue increased 5% to $16.9 billion as the company delivered 1.4 billion packages during the quarter, 7.1% higher than a year earlier.

According to the company, much of the reason for the loss was due to pension charges of $1.90 per share. When it and other one-time charges are excluded, adjusted earnings for the final quarter of 2016 were $1.63 compared to $1.57 a year earlier but 5 cents less than a consensus estimate by a poll of Wall Street analysts.

UPS’ domestic package operation revenue increased 6.3% from a year ago to $10.9 billion while its adjusted operating profit fell slightly to $1.33 billion. Average daily shipments increased 5% to 19.6 million.

Its supply chain and freight business, which includes the mainly less-than-truckload carrier UPS Freight, saw a 2.6% increase in fourth quarter revenue over the same time in 2015, totaling $2.7 billion.

LTL revenue increased 2% to $604 million as the number of LTL shipments edged up 0.3% and gross weight hauled improved 2.1% Despite this, UPS had an operating loss of $139 million versus a fourth quarter 2015 operating profit of $187 million.

For all of 2016, UPS net income totaled $3.4 billion, down 29.2% from 2015 as total revenue increased 4.4% to $60.9 billion.

Paccar Net Income Declines 16.8%

Meantime, in the truck and engine manufacturing arena, the parent company to truck marques Kenworth and Peterbilt, saw both its fourth-quarter and full-year 2016 profits fall due to lower truck deliveries in North America.

Paccar Inc. earned $288.8 million, or 82 per share, for the fourth quarter of 2016 compared to $347.2 million, or 98 per share, a year earlier. Net sales and financial service revenues of $4.07 billion compared to $4.36 billion for the same period in 2015.

“Paccar’s financial results reflect the company’s premium-quality products and services, increased European truck deliveries, higher truck market share, and good aftermarket parts and Paccar Financial Services results,” said CEO Ron Armstrong.

For all of 2016, the company reported net income declined sharply to $521.7 million, or $1.48 per share, compared to $1.6 billion, or $4.51 per share in 2015. The 2016 figure includes $833 million in a non-tax-deductible, non-recurring charge for a European Commission settlement over claims of price fixing. Total revenue for the year of $17.03 billion compared to $19.12 billion in 2015. Paccar reported adjusted net income of $1.35 billion, or $3.85 diluted share in 2016 versus $1.60 billion, or $4.51 per share in 2015.

Paccar had 14,400 new truck deliveries in the U.S. and Canada in the most recent quarter, down from 15,900 a year earlier. For 2016, the drop was by an even larger margin, 71,500, compared to 91,300 in 2015.

Despite these declines, the company said Kenworth and Peterbilt achieved Class 8 retail market share of 28.5% in the U.S. and Canada in 2016 compared to 27.4% in 2015.

European truck deliveries fell by just 200 in the second quarter to 14,800, but increased in 2016 to 53,000 from 47.400 in 2015.

About the author
Evan Lockridge

Evan Lockridge

Former Business Contributing Editor

Trucking journalist since 1990, in the news business since early ‘80s.

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