WSJ version of latest news on UPS offering.
October 20, 1999
United Parcel Service Boosts Value
Of Its Planned IPO to $4.6 Billion
Dow Jones Newswires
ATLANTA -- United Parcel Service of America Inc. said Wednesday it
increased the size of its planned initial public offering at as much as $4.6
billion, which would make it the largest IPO ever.
The shipping company said it now plans to offer
109.4 million shares and expects the shares to be
priced at $36 to $42 each. In July, the company
said it would offer as much as $3 billion worth
of stock. Conoco Inc., DuPont Co.'s former oil
unit, went public in an October 1998 offering
that raised $3.96 billion.
After the offering, scheduled for next month, 1.2 billion shares would be
outstanding. That would value the company at $46.8 billion at the midpoint of
the expected price range. Underwriters include Morgan Stanley Dean Witter &
Co., Goldman Sachs & Co., Merrill Lynch & Co., Credit Suisse First Boston
Corp., Salomon Smith Barney and Warburg Dillon Read.
Setting the table for the widely anticipated IPO, UPS earlier this week posted a
29% increase in third-quarter net income. UPS said earnings climbed to $577
million, or $1.03 a share, from $449 million, or 81 cents a share, a year earlier.
Boosted by strong domestic volume and robust overseas results, revenue
increased 9% to $6.72 billion.
The numbers were the last quarterly financial report by closely held UPS
before the planned IPO next month. Analysts said the numbers indicate that
UPS isn't suffering from the slowing domestic growth levels that have eroded
profits in recent months at the company's two largest rivals, FedEx parent
FDX Corp. and Airborne Freight Corp.
The third-quarter growth reflected a strong 6.8% increase in average daily
package volume and improved profits per delivery. The company's standard
next-day delivery services grew 15%. It said profit from U.S. package
operations rose 16% to $879 million from $757 million.
UPS said its international operating results swung to a profit of $38 million
from a loss of $15 million a year earlier. Overseas revenue increased to $862
million from $782 million a year earlier, driven by a 22% increase in
cross-border package deliveries.
Before the IPO, UPS plans a 2-for-1 stock split for the 547 million shares
currently outstanding. UPS isn't publicly traded, but shares of the company are
held by thousands of employees and retirees, their relatives and heirs, and
charitable foundations tied to the company.
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