10:05AM New York – UPS reported a loss in the fourth quarter on one-time contribution to pension plan.

UPS (UPS: chart) today reported adjusted diluted earnings per share of $1.13 for its fourth quarter, an 8.7% increase over last year. Revenue improved 6.1% driven by a double-digit increase in international export volume.

During the quarter, the company announced the ratification of a new five-year agreement with the International Brotherhood of Teamsters, eight months before expiration of the existing contract. As a result, $6.1 billion was paid to withdraw approximately 45,000 UPS employees from the Central States multi-employer pension plan and expensed to the U.S. Package segment in the quarter.

Including the impact of that charge, diluted earnings per share fell to a loss of $2.46 for the three-month period.

Average daily package volume rose by 359,000 to 17.7 million pieces.

For the full year, the company delivered a record 3.97 billion packages, an average of 15.8 million per day. Consolidated revenue climbed 4.5% to $49.7 billion. Adjusted diluted earnings per share were $4.17, an increase of 8% compared to 2006 and at the midpoint of UPS’s earnings guidance for 2007. Before adjustments, operating profit equaled $578 million and diluted earnings per share totaled $0.42.

Operating margins in the quarter, excluding one-time adjustment for the pension contribution fell to 13.8% from 14.3%.