UPS restated its 2007 results after it identified a $65 million state income tax benefit — related to the company’s withdrawal from the Central States multi-employer pension plan — that the company had incorrectly recorded in the fourth quarter.
The restatement cut adjusted diluted earnings per share to $4.11, amounting to a 6.5 percent rise over the prior year, instead of the 8 percent rise previously reported just a month earlier, on Jan. 30. Then, UPS gave its adjusted diluted EPS as $4.17.
The package delivery giant said that it discovered the error during its regular internal review process prior to the filing its annual report with the Securities and Exchange Commission. The correction, it said, has no impact on revenue, operating profit, income before taxes, or segment results for the quarter or for all of 2007, nor does it impact cash flow or liquidity.
The revision cut fourth quarter diluted earnings per share from $1.13 to $1.07.
The Associated Press pointed out that the revision means the company missed Wall Street expectations, instead of meeting them, as UPS had reported earlier.
In the first quarter of 2007, UPS recorded a $68 million pre-tax charge related to cash payouts and the acceleration of stock compensation and certain retiree healthcare benefits for employees who accepted a voluntary separation opportunity.
UPS said its previous estimates for 2008 EPS remain unchanged: 94 cents to 98 cents
for the first quarter, and $4.30 to $4.50 for the year. Its estimated effective tax rate is expected to stay at about 36 percent, it added.