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United Parcel Service swings to Q4'17 profit YOY

United Parcel Service Inc. returned to profit in the fourth quarter of 2017, supported by a U.S. tax reform gain and revenue growth across all its business segments.

The company reported net income of $1.10 billion, or $1.27 per share, for the quarter ending Dec. 31, 2017, compared with a loss of $239 million, or 27 cents per share, in the prior-year period.

Fourth-quarter 2017 earnings increased by 30 cents per share due to the U.S. tax reform, but also included a pretax pension charge of $800 million, which represents an after-tax charge of 70 cents per share.

Revenue grew 11.2% year over year to $18.83 billion from $16.93 billion, while operating profit came in at $1.49 billion following a loss of $428 million in the fourth quarter of 2016. UPS delivered 1.5 billion packages during the quarter, up 5.7% from the same period in 2016.

The U.S. domestic segment's revenue rose 8.4% year over year to $11.84 billion, while revenue from the international segment climbed 12.5% to $3.75 billion. The supply chain and freight segment's revenue increased 20.8% to $3.24 billion.

The company's full-year 2017 net income was $4.91 billion, or $5.61 per share, up from $3.43 billion, or $3.87 per share, in 2016. Revenue increased to $65.87 billion from $60.90 billion.

For 2018, UPS is expecting adjusted earnings between $7.03 per share and $7.37 per share, compared with adjusted EPS of $6.01 in 2017.

The company is also planning capital expenditures between $6.5 billion and $7.0 billion, mostly investments in new technology, aircraft and automated capacity.