UPS announced fourth quarter 2014 adjusted diluted earnings per share of $1.25, flat to the prior-year period. On a GAAP basis, fourth quarter 2014 diluted earnings were $0.49 per share, compared to $1.25 in 2013.
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UPS delivered 1.3 billion packages during the fourth quarter, an increase of 8.1% over the same period last year. For calendar year 2014, the company completed delivery of 4.6 billion packages, up 6.8% over 2013.
For the year ended Dec. 31, UPS generated $3.4 billion in free cash flow, after making after-tax contributions of $800 million to company-sponsored pension plans, as well as $1.5 billion to transfer certain union employees to multiemployer healthcare plans in the second quarter. In addition, the company invested $2.3 billion in capital expenditures during the year.
In 2014, UPS paid dividends of $2.4 billion, an increase of 8.1% per share over the prior year. The company also repurchased more than 26 million shares for approximately $2.7 billion.
U.S. Domestic fourth quarter revenue climbed 7.5% to $10 billion. Daily package volume increased 6.6% with Deferred Air and Ground up 11% and 7.1%, respectively.
Fourth quarter adjusted operating profit was $1.1 billion, a 5.3% drop from the prior-year period. Operating expense increased more than $200 million primarily due to higher than anticipated peak related costs. Decreased productivity, higher contract carrier rates as well as overtime and training hours contributed to the excess costs.
Total revenue per package was down 0.8%, as lower fuel surcharges and changes in product mix offset increases in base rates. UPS SurePost product grew 28% in the fourth quarter.
On a reported basis, fourth quarter 2014 operating profit was down 63% to $444 million as a result of the pension mark-to-market charge and the transfer of certain healthcare liabilities.
International revenue, on a currency-neutral basis, increased 5.9% to $3.4 billion on 4.3% growth in daily package volume. Export shipments were up 5.2% per day, driven primarily by 8.5% growth from Europe, offset somewhat by a decline in Asia export volume. Non-U.S. domestic products were up 3.6% with strong growth in Canada, Spain and Mexico.
Underlying business performance showed positive momentum. However, currency fluctuations contributed $40 million in year-over-year comparison headwinds. In addition, one-time items, including a restructuring charge, weighed on results by approximately $30 million. International adjusted operating profit was $536 million, relatively flat with the prior-year.
Export yield contracted 1.7% on a currency-neutral basis, as a result of lower fuel surcharges, product mix and stronger intra-regional shipment growth. Non-U.S. domestic revenue per package increased 0.8% when adjusted for currency.
On a reported basis, operating profit for the fourth quarter declined 38% to $335 million as a result of the pension mark-to-market charge and the transfer of certain healthcare liabilities. ■