The company forecast 2010 earnings within a range that's consistent with Wall Street expectations.
The profit reported Tuesday for the final three months of 2009 was equivalent to 75 cents per share, compared with a profit of $254 million, or 25 cents per share, a year earlier.
Revenue fell 2.5 percent to $12.38 billion from $12.70 billion.
Analysts surveyed by Thomson Reuters were expecting an adjusted profit of 74 cents a share on revenue of $12.25 billion.
For 2010, UPS expects earnings per share to be within a range of $2.70 to $3.05. Analysts were expecting full-year 2010 earnings of $2.81 a share.
UPS said capital expenditures this year will total roughly $1.8 billion, well below the historical range.
UPS and rival FedEx Corp. are viewed as economic bellwethers. They have seen signs of improving demand for shipping in recent months. But there is uncertainty about when the U.S. economic recovery will pick up speed. UPS Chief Financial Officer Kurt Kuehn said in a statement that the first quarter "will be the most challenging of the year."
FedEx reported in December a 30-percent decline in fiscal second-quarter earnings. FedEx, based in Memphis, Tenn., said then that the economy has "reached a turning point," but a full recovery could still be a long way off.
UPS has been cutting costs to weather the rough patch in the economy.
It's cutting 1,800 management and administrative jobs, less than 1 percent of its global work force, as it repositions itself for a gradual economic recovery with improved technology and fewer employees. The cuts are meant to streamline the company's U.S. small package segment, which represents roughly 60 percent of UPS' annual revenue.
In the fourth quarter, package volume rose 1.4 percent to 1.1 billion pieces, while average volume per day was unchanged at 17.3 million packages. During the holiday shipping season, global volume exceeded 22 million packages on eight days, including two on which it exceeded 24 million packages. UPS said it experienced more delivery volume than in 2008 on each of the seven days before Christmas.
UPS, also known as United Parcel Service, also provides supply chain and freight services. The Atlanta company serves more than 200 countries and territories worldwide.
International operating profit jumped 27.6 percent.
For all of 2009, UPS' profit fell to $2.15 billion, or $2.14 a share, compared to a profit of $3 billion, or $2.94 a share, for all of 2008. Twelve-month revenue fell to $45.30 billion from $51.49 billion in 2008.
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On the Net:
UPS Inc.: http://www.ups.com
