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Earnings Watch: UPS Reports Loss, Paccar Earnings Fall

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

Evan Lockridge
Evan LockridgeFormer Business Contributing Editor
January 31, 2017
Earnings Watch: UPS Reports Loss, Paccar Earnings Fall

 

3 min to read


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.

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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.

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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.

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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.

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