By Lynn Adler

(Reuters) – United Parcel Service (UPS.N: Quote, Profile, Research, Stock Buzz) said it expects profit to rise by 9 to 15 percent this year, with improving profit margins offsetting an uneven global economy.

The world’s largest package delivery company on Tuesday said fourth-quarter net income fell to $725 million, or 74 cents a share, from $1.025 billion, or $1.02 a share, a year ago. Its results for the just-ended quarter included a $527 million charge related to a change in how it accounts for pension expenses.

Its shares rose 1.7 percent to $77.45 in premarket trading from a $76.15 close on the New York Stock Exchange.

UPS and No. 2 package delivery company Fed (FDX.N: Quote, Profile, Research, Stock Buzz) are viewed as economic bellwethers because of the volume of packages they handle.

Fourth-quarter revenue at UPS rose 6 percent to $14.2 billion, compared with the $14.4 billion expected by analysts.

The Atlanta-based company set an initial 2012 profit target of $4.75 to $5 per share for 2012, which would represent 9 percent to 15 percent growth over 2011 levels and at its midpoint is above the $4.80 per share analysts had expected.

Jan 31 (Reuters) – United Parcel Service (UPS.N: Quote, Profile, Research) reported higher quarterly profit after adjusting for a new pension accounting method, and forecast higher 2012 earnings.

The world’s largest package delivery company on Tuesday said fourth-quarter net income fell to $725 million, or 74 cents a share, from $1.025 billion, or $1.02 a share, a year ago.

After adjusting for a pension fund accounting change started in the fourth quarter, profit rose to $1.28 a share from $1.06.

UPS said the new accounting method resulted in after-tax charges in 2011 and 2010 of $527 million and $75 million, respectively.

Fourth-quarter revenue rose 6 percent to $14.2 billion, roughly in line with the $14.4 billion expected by analysts, according to Thomson Reuters I/B/E/S.

(Reporting By Lynn Adler; editing by John Wallace)

((lynn.adler@thomsonreuters.com)(1-646-223-6307)(Reuters Messaging: lynn.adler.reuters.com@reuters.com)) Keywords: UPS/

NEW YORK (Reuters) – Borrowing by U.S. companies for equipment spending leaped in December, in a year-end rush to close loans to replace aging products rather than a signal of expansion, the Equipment Leasing and Finance Association (ELFA) said on Tuesday.

Highly competitive prices for goods ranging from office furniture and computers to industrial equipment, and more credit access from lenders, drove up demand for business financing, the group said.

Businesses signed up for $10.8 billion in loans, leases and lines of credit in December, up 74 percent from November and 20 percent from a year ago, ELFA said.

Total new loan volume rose 25 percent in the year, according to the group, which reports on economic activity for the $628 billion equipment finance sector.

Uncertainties surrounding the European debt crisis and U.S. budget deficit are keeping companies cautious about ramping up spending for growth, ELFA Chief Executive William Sutton said in an interview.

Widespread economic forecasts of 2.5 percent to 3 percent U.S. gross domestic product growth in 2012 bodes well for steady borrowing demand, he said. “But again, it doesn’t indicate we’re moving out of the replacement cycle into any kind of investment or expansion cycle.”

Replacement will still be one of the significant drivers for business spending on equipment in 2012, Sutton added.

Jan 24 (Reuters) – Shares of CSX and Kansas City Southern, two of the largest U.S. railroads, fell on Tuesday after earnings misses and warnings that low natural gas prices would curb demand for coal hauled by rail.

Kansas City Southern Corp (KSU.N: Quote, Profile, Research) and CSX Corp (CSX.N: Quote, Profile, Research) reported a rise in fourth-quarter profits on Monday, boosted by higher core prices and productivity improvements. But the companies fell just short of Wall Street expectations.

Investors reacted negatively as CSX, the No. 2 public U.S. railroad, raised questions about coal demand. Coal represents more than 30 percent of volume by revenue at CSX and 20 percent at Kansas City Southern.

“I don’t like natural gas this cheap,” Clarence Gooden, CSX’s chief sales and marketing officer, said on a conference call Tuesday morning.

Shares of Kansas City Southern, the No. 4 U.S. railroad, were down 8 percent to $66.56 but had recovered from even deeper declines earlier in the session. Shares of CSX fell 4 percent to $21.74.

Kansas City Southern shares posted the second-biggest decline on the New York Stock Exchange. The shares touched a 52-week high last week.

Among other big railroads, shares of Union Pacific Corp (UNP.N: Quote, Profile, Research) were fractionally higher at $111.67, while shares of Norfolk Southern Corp (NSC.N: Quote, Profile, Research) were down slightly at $75.73.

By Lynn Adler

(Reuters) – Union Pacific Corp (UNP.N: Quote, Profile, Research, Stock Buzz), the No. 1 U.S. publicly held railroad, reported above-forecast quarterly results driven by higher volume and pricing, and forecast record profit in 2012 on slow but steady economic growth.

Core pricing rose 5 percent as automotive, chemical, energy and industrial products helped push total revenue carloads up 3 percent in the fourth quarter from a year ago. Freight revenue rose in all six of the company’s business segments.

“We expect continued slow but steady economic growth in 2012,” Union Pacific Chief Executive Jim Young said in a statement on Thursday.

The company’s shares, which have shot up more than 45 percent from lows set in October, were up 3.7 percent at $113.93 in late morning trade on the New York Stock Exchange.

The Dow Jones Transportation average was up less than half of that.

Union Pacific plans to spend a record $3.6 billion this year, topping $3.2 billion in 2011, to replace aging equipment, put in more track and other infrastructure updates to improve productivity and safety and to meet expected volume growth, executives told analysts on a conference call.

Jan 19 (Reuters) – Union Pacific Corp (UNP.N: Quote, Profile, Research), the No. 1 U.S. publicly held railroad, reported higher quarterly profit and revenue that beat estimates, driven by higher volume, core price gains and fuel surcharges.

Automotive, chemical, energy and industrial products helped push total revenue carloads up 3 percent in the fourth quarter from a year ago, while freight revenue rose in all six of the company’s business segments.

“We expect continued slow but steady economic growth in 2012,” Union Pacific Chief Executive Jim Young said in a statement.

The company’s shares, which have shot up more than 40 percent from lows set in October, rose 3 percent in pre-market trading to $113.50 on the New York Stock Exchange.

Revenue rose by double digits in all but the agricultural sector, with the five other groups posting revenue increases between 13 percent for intermodal shipments to 26 percent for auto-related shipments.

Intermodal refers to the shipment of goods in containers that can be moved from one form of transportation to another, such as from train to truck or from train to ship.

The Omaha, Nebraska-based company on Thursday reported that net income rose to $964 million, or $1.99 per share, in the fourth quarter from $775 million, or $1.56 a share, a year before.

By Lynn Adler

(Reuters) – Deutsche Post DHL affirmed its recently raised 2011 outlook after a robust Christmas shipping season, though low growth or recession could hurt 2012 revenues in Europe, Chief Financial Officer Larry Rosen said in a Tuesday interview in New York.

Europe’s biggest mail and express delivery company forecasts little to no European economic growth this year, but no recession.

Rosen said the Bonn-based company’s bigger presence in Germany, France and the UK — where the economies are outperforming those of its other, smaller European markets, such as Greece and Italy, has so far mitigated the impact of the sovereign debt crisis.

“Have we had much direct impact on our businesses so far? Not a huge impact,” he said. “But certainly if we would have very low economic growth or a recession in Europe during 2012, we would expect that would have a negative impact on our revenues for Europe.”

Rosen, in a Monday investor presentation in New York, confirmed the 2011 forecast, raised in November as Asia demand boosted third-quarter results, for earnings before interest and taxes or EBIT to top 2.4 billion euros.

The company, which competes with U.S.-based FedEx Corp and United Parcel Service, on March 9 will announce its full-year 2011 results and provide a 2012 forecast.

Dec 29 (Reuters) – The head of the Canadian Auto Workers union is looking for a green light from members to potentially strike Caterpillar (CAT.N: Quote, Profile, Research) over a dispute contract in London, Ontario.

Caterpillar and the CAW have been negotiating a new deal for locomotive-manufacturing employees who have a contract expiring at the end of this week. The union has repeatedly said the Peoria, Illinois company’s offer is too low, but now the two sides are running out of time.

CAW President Ken Lewenza said in a Thursday interview that the union received and rejected the latest proposal on Tuesday. He said the latest offer calls for a “better than 50 percent reduction in our pay and a better than 50 percent reduction in our health care benefits, with the elimination of the pension plan.”

The deal would affect about 425 production workers who came to Caterpillar in the 2010 acquisition of Electro-Motive Diesel. The current contract expires at midnight on Dec. 31. Lewenza said the CAW is opposed to cutting core wages and benefits while Caterpillar officials told Reuters its deal is “fair, reasonable and market competitive.”

The CAW will meet with members Friday to discuss the next steps.

“The reality is we’re having a membership meeting tomorrow morning, and giving them an update on the negotiations and we’re going to ask our membership for strike authorization because the proposal is so unprecedented, quite frankly,” he said.

Caterpillar said it has taken steps to ensure it can continue fulfilling orders regardless of what happens in negotiations with the CAW.

By Lynn Adler

(Reuters) – KB Home (KBH.N: Quote, Profile, Research, Stock Buzz) posted a lower fourth-quarter profit on reduced margins, sending shares down as much as 8.5 percent, but said orders for new homes surged and home prices rose in another sign that the beleaguered housing market was gaining a foothold.

The fifth-largest U.S. homebuilder, which competes with Toll Brothers (TOL.N: Quote, Profile, Research, Stock Buzz), said orders jumped 38 percent, with the greatest increases in higher-priced West Coast markets.

Orders are a key indicator for builders who do not book revenue until they close on a house.

It is a particularly tough time for builders of new homes, with a massive overhang of used houses and foreclosed homes in the market, resulting in lower pricing power.

“In addition to delivering more homes at higher prices, we expect that operating margins will improve in 2012 on a year-over-year basis starting in the first quarter and will be positive for the year as we execute our build-to-order model,” Chief Executive Jeffrey Mezger told analysts on a conference call.

The company’s shares were down 6.8 percent at $7.21 on Wednesday afternoon, off an earlier low at $7.08.

Dec 21 (Reuters) – KB Home (KBH.N: Quote, Profile, Research) posted a lower fourth-quarter profit on reduced margins, but or ders for new homes surged in another sign that the beleaguered housing market was gaining a foothold.

The fifth-largest U.S. homebuilder, which competes with Toll Brothers (TOL.N: Quote, Profile, Research), said orders jumped 38 percent to 1,494. Orders are a key indicator for builders who do not book revenue until they close on a house.

It is a particularly tough time for builders of new homes, with a massive overhang of used houses and foreclosed homes in the market, resulting in lower pricing power.

The company’s shares, which shot up 10 percent on Tuesday and another 5 percent in premarket trading after the results, were down 5.4 percent at $7.32 in morning New York Stock Exchange trading.

“We got some good numbers from them this morning that reflect the management of the company, in terms of where their communities are, and what we see in our own data, that the housing market is setting up for a plus year next year,” said Steve Blitz, chief economist at ITG Investment Research.

The share price swing reflects a trend of investors that sell on bounces and pop back in at lows, he said. “There really isn’t yet a sense that any of these home-builder stocks are at a point where you can make that longer-term investment,” or that housing can soon return anywhere near pre-recession levels.

Evidence is mounting that a recovery is building, though the improvement has been erratic. U.S. housing starts and permits to build jumped to a 1 1/2-year high in November, the Commerce Department reported on Tuesday. [ID:nL1E7NK338] Homebuilders’ shares shot up as a result, with KB Homes jumping 10 percent.