By Christopher Hinton
NEW YORK (MarketWatch) – UPS raised its fourth-quarter profit guidance on Friday through cost cutting, and announced plans to reduce its workforce by 1,800 beginning in April, as it further realigns its business.

For the quarter ended Dec. 31, the Atlanta shipping giant said it now expects to earn 73 cents to 75 cents a share, compared to its prior estimate of 58 cents to 65 cents a share.

“The stronger earnings stem from better-than-expected results in both domestic and international operations and savings through cost management,” said Chief Financial Officer Kurt Kuehn. “However, we still anticipate a gradual economic recovery with improvement more evident as 2010 progresses.”

Shares of UPS (UPS 59.90, +2.49, +4.33%) rose 4.5% in premarket trading to $60.

Beginning in April, UPS said it would reduce its U.S. regions to three from five and its U.S. districts to 20 from 40, thereby streamlining its management structure.

The restructuring will eliminate about 1,800 management and administrative assistants, the company said, in part through normal attrition and by buyout offers for about 1,110 employees.

UPS expects to incur a one-time charge in 2010 that will be offset by cost savings in the U.S. small package business.

Details will be provided during the 4th quarter earnings call.

Christopher Hinton is a reporter for MarketWatch based in New York.

If you enjoyed this post then Subscribe to Savvy Investor via RSS