“Under David’s leadership as CEO, UPS ended 2016 with positive results in many areas including record earnings,” the company said in its filing.
“However, the challenges of forecasting and adapting the UPS business model to the growing (business-to-consumer) environment (caused costs to grow) at a disproportionate rate and kept overall results below expectations,” the company said. UPS said the strong dollar also crimped the company’s bottom line.
UPS reported $3.4 billion in profits last year, down 29 percent from 2015's $4.8 billion profit. Part of the profit decline was due to billions of dollars in pension costs for its U.S. and overseas workers.
The company’s revenues increased more than 4 percent last year, to $60.9 billion.
But some analysts were disappointed that UPS’ increased reliance on online order deliveries was hurting its profits.