United Parcel Service has reported a 56 per cent drop in first-quarter earnings to US$718 million from $1.49 billion in the year-ago quarter and warned the second quarter will also be difficult. Revenue was off 13.7 per cent at $10.9 billion with the continuing deterioration in global economic activity resulting in decreased revenue and profitability in all business segments, according to UPS. The company added that it took an impairment charge on its entire fleet of 44 DC-8 aircraft for a non-cash charge to expense of $181 million. And it added that despite its quarterly losses, the company effectively managed its business during the ongoing economic downturn and expanded domestic and global market share while generating strong cash flow. “Economic indicators tell us recovery in the US might begin late this year, but more likely not until 2010,” UPS’s chief financial officer, Kurt Kuehn said. “So we expect the second quarter will be another difficult one.”