UPS profit dips over 55%

Asia - Profits plunged over 55% for the first quarter at UPS, as fewer people sent packages and used premium services like next-day air worldwide.

Revenue was off 13.7% to reach US$10.9 billion, UPS said.  

In Asia, growth remained to be in the Chinese and Indian markets, with 10% and 5% export volume growth respectively compared to the same period a year earlier.

"We will continue to make measured investments in the region where we see strategic growth opportunities, such as China, where our Shanghai International hub is already in operation," said Derek Woodward, president of UPS Asia Pacific.

The company added that it will continue to make strategic investments including expanding its Worldport facility, building a new air hub in Shenzhen, China and opening new healthcare distribution facilities in Europe and Puerto Rico.

It will however scale back 2009 capital spend by an additional US$200 million, bringing the total to just below US$2 billion.

Recovery in the market is expected to be slow, the company said.

"Economic indicators tell us recovery in the US might begin this late this year, but more likely not until 2010," said Kurt Kuehn, CFO of UPS.

Kuehn said the company has identified US$300 million in additional initiatives to help offset some of the recessionary impact the company is experiencing.