ATLANTA, Jan. 30, 2007 - Led by a strong performance in its international operations, UPS (NYSE: UPS) today reported net income of $1.13 billion and a 10% increase in diluted earnings per share to $1.04 for the fourth quarter ended Dec. 31, 2006.


For the full year of 2006, revenue rose almost 12%; operating profit increased 8%, and earnings per share climbed 11.2% to $3.86. The international business reached new heights, reporting more than $1.7 billion in operating profit. The company set a new record for package volume in 2006, delivering almost 4 billion packages or an average of 15.6 million per day.


"UPS had a very good year in 2006," said Chairman and CEO Mike Eskew. "We posted new highs in revenue, operating profit and earnings per share. We finished the year with a well-executed peak season, and strong execution will continue to be critical for us as we move forward in 2007."


Consolidated Results                   

                                              4Q 2006                            4Q 2005

Revenue                                  $12.6 B                             $12.0 B 

Operating profit                          $1.8 B                               $1.7 B

Operating margin                         14.3%                               14.3%

Average volume per day              17.3 M                              16.8 M

Diluted earnings per share             $1.04                                $0.95


The fourth quarter produced solid earnings growth despite a slowing U.S. economy. Consolidated average daily package volume rose 3.3%, or 558,000 additional packages each day. Pricing remained firm around the globe. Consolidated average revenue per piece increased 2%.


Cash Position

UPS ended 2006 with nearly $2 billion in cash and marketable securities. For the year, it also:


  • Generated cash from operations of $5.7 billion.
  • Purchased 32.6 million shares, reducing total shares outstanding by 2.5%.
  • Paid $1.6 billion in dividends.
  • Invested $3.1 billion in capital expenditures.


U.S. Package                             

                                    4Q 2006                             4Q 2005

Revenue                         $8.13 B                              $7.82 B

Operating profit               $1.30 B                              $1.24 B

Operating margin               15.9%                                15.8%

Average volume per day    15.4 M                               14.9 M


Ground volume posted a healthy 3.6% increase in the quarter. Next Day Air volume declined marginally and deferred volume was flat against strong prior-year results. The company did an excellent job of executing on its holiday peak season plan, with deliveries exceeding 22 million on two days. Package delivery volume exceeded 20 million a day on seven days during the 2006 peak compared to five days the prior year.


International Package   

                                       4Q 2006                             4Q 2005

Revenue                           $2.44 B                              $2.22 B

Operating profit                  $514 M                              $431 M

Operating margin                 21.0%                                 19.4%

Average volume per day        2.0 M                                  1.8 M


Total international export volume grew 11.3%. Non-U.S. domestic package volume posted solid 4% growth as the company overlapped the effect of an acquisition.


During the quarter, UPS announced the expansion of its international shipping portfolio by providing three time-definite delivery options each day to the world's 30 largest markets, up from one or two daily options. These new delivery services make UPS's international delivery portfolio the most expansive in the industry and cover more than 80% of the world's GDP.


Supply Chain and Freight               

                                            4Q 2006                               4Q 2005

Revenue                                $2.06 B                                $1.91 B

Operating profit (loss)               $(1) M                                   $43 M

Operating margin                                                                2.3%


The Supply Chain and Freight segment improved from the third quarter, reflecting the positive impact of cost control measures taken in the fourth quarter. UPS Freight's performance was impacted by the general softening in the Less-Than-Truckload (LTL) environment.



"We anticipate another good year in our global small package business despite a slowing U.S. economy," said Scott Davis, UPS's vice chairman and chief financial officer. "We also expect our Supply Chain and Freight segment to gain momentum as the year progresses."


Davis said he anticipates diluted earnings per share for the full year 2007 to increase 6-to-10%, or within a range of $4.10 to $4.25, compared to the $3.86 reported in 2006. For the first quarter of 2007, UPS is projecting diluted earnings per share in the range of $0.94 to $0.98 compared to the $0.89 reported in the prior-year period.


"We're encouraged by the opportunities we see for our company around the globe," Davis added. "We're operating a healthy business in a vital industry, and we believe our long-term strategy of providing supply chain solutions to our customers is right on target."


UPS, which celebrates its 100th anniversary in 2007, is the world's largest package delivery company and a global leader in supply chain services, offering an extensive range of options for synchronizing the movement of goods, information and funds. Headquartered in Atlanta, Ga., UPS serves more than 200 countries and territories worldwide. UPS's stock trades on the New York Stock Exchange (UPS) and the company can be found on the Web at To get UPS news direct, visit


EDITOR'S NOTE: UPS Chairman and CEO Mike Eskew and Vice Chairman and CFO Scott Davis will discuss fourth quarter and 2006 results with investors and analysts during a conference call at 8:30 a.m. EST today. That call is open to listeners through a live Webcast. To access the call, go to and click on "Earnings Webcast."



Except for historical information contained herein, the statements made in this release constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements, including statements regarding the intent, belief or current expectations of UPS and its management regarding the company's strategic directions, prospects and future results, involve certain risks and uncertainties. Certain factors may cause actual results to differ materially from those contained in the forward-looking statements, including economic and other conditions in the markets in which we operate, governmental regulations, our competitive environment, strikes, work stoppages and slowdowns, increases in aviation and motor fuel prices, cyclical and seasonal fluctuations in our operating results, and other risks discussed in the company's Form 10-K and other filings with the Securities and Exchange Commission, which discussions are incorporated herein by reference.