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Pension Accounting Tweaks Hit UPS Profit

Pension accounting adjustments have impacted UPS.

A corporate accounting method for tracking pensions is causing headaches at UPS and having a detrimental effect on its earnings.

The Associated Press reports that despite two years of strong earnings and a successful

A corporate accounting method for tracking pensions is causing headaches at UPS and having a detrimental effect on its earnings.

The Associated Press reports that despite two years of strong earnings and a successful improvement in international performance, the logistics and shipping company's net income report was hit by an accounting charge.

"While I wouldn't call it a robust economy right now, I do think the small package market is performing better than we would have thought four and five months ago," UPS chairman and CEO Scott Davis said in a conference call, as quoted by the AP.

The company also acknowledged that its global growth could suffer a bit in the coming year, but remained optimistic that its business in the U.S. would carry its earnings. UPS recently announced that it would be working to "reduce the volatility of its results and present a 'cleaner' picture of its underlying operational performance in 2012 and beyond" by adopting the mark-to-market pension accounting method, the Financial Times reports.

As The Wall Street Journal points out, UPS is not alone in its decision to change its pension accounting tactics - International Business Machines Corporation, Reynolds American and Honeywell International have also changed their methods since 2010.