UPS earnings drop nearly 56%

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UPS Inc. today today reported first quarter revenue of $10.9 billion, down 13.7% from the same quarter last year, and saw its earnings fall nearly 56% to $401 million, compared to profit of $906 million a year ago.

The company said the drop in revenue stemmed from less people sending packages and using premium services due to the recession.

For the three months ended March 31, consolidated average daily volume totaled 14.5 million packages, a 3.9% decline. Average revenue per piece decreased 6.9%, reflecting changes in product mix, declining fuel surcharges and weight per package and the negative impact of currency, according to UPS.

The January-March profit was 40 cents a share, compared to year-ago earnings of 87 cents a share.

UPS said it expects the second quarter to be as difficult.

"Economic indicators tell us recovery in the U.S. might begin late this year, but more likely not until 2010," said Kurt Kuehn, UPS's chief financial officer, in a statement.  "So we expect the second quarter will be another difficult one. As a result, UPS anticipates earnings per diluted share in a range of $0.45 to $0.55."

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