What UPS earnings mean for economy

UPS logo on the side of a delivery truck


Steve Chiotakis: If corporate earnings are any indicator, we got a snapshot of where the economy is headed from UPS today. Profit at the shipping giant fell more than 9 percent last quarter. But the company did better than analysts expected, and predicted a strong year. Marketplace's Amy Scott is with us live from our bureau in New York. Good morning, Amy.

Amy Scott: Good morning.

Chiotakis: So what does shipping tell us about the overall economy?

Scott: Well if the economy's doing better, people ship more stuff. Cary Leahey is with Decision Economics. He says in general, the shipping and transportation industries have been improving.

Cary Leahey: The nice thing about UPS is it's a little more broad-based. So it's picking up not only businesses shipping to retailers, but people shipping back and forth to each other. So it's a little broader measure that things are doing a little better.

UPS says shipping was strong during the holiday season, and it expects profits in the coming year to increase by anywhere from 17 [percent] to 32 percent. That said, though, UPS announced last month it's letting go of 1,800 workers.

Chiotakis: So the cost-cutting continues. Alright, in this latest round, Amy, of corporate earnings, analysts have been wanting to see actual revenue growth, not just cost-cutting. How's that looking so far?

Scott: Right. Well Leahey tells me that overall, 3 out of 4 companies have reported better-than-expected earnings, and that we are seeing more revenue growth, companies actually bringing in money. But revenue at UPS fell 2.5 percent last quarter, so it's still a pretty mixed bag . . . or should I say, box.

Chiotakis: Marketplace's Amy Scott reporting live from New York. Amy, thanks.

Scott: Thank you.

About the author

Steve Chiotakis was the host of Marketplace Morning Report until January 2012.


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