United Parcel Service Inc. (UPS) executives forecast a gradual global rebound in 2010, with a challenging first quarter but economic conditions steadily improving throughout the year.

"It looks like this recession is finally over," Chief Executive Scott Davis told analysts Tuesday on a post-earnings conference call.

Industrial production should be up more than 4% overall this year, he said, although he cautioned that the momentum will be back-end loaded.

Chief Financial Officer Kurt Kuehn said he expects "an upward slope" in terms of economic activity throughout 2010. He said UPS should see gains in pricing and volume as the year progresses.

The optimism prompted UPS to reinstitute an annual profit estimate, a practice it had halted during the economic downturn. UPS also announced that it will reinstate executive compensation plans, after freezing management salaries early last year.

The company projected 2010 earnings of $2.70 to $3.05 a share. Wall Street's average forecast calls for UPS to earn $2.81 a share this year.

UPS said it expects overall package volume to grow in the first quarter, although it stopped short of issuing a specific target. It said first-quarter domestic volume will be up in line with gross domestic product, while international volume will continue "to outperform the market."

Overall volume climbed 1.4% in the fourth quarter, though average daily volume was essentially flat.

Shares of UPS were up 63 cents, or 1.1%, to $59.02 in early trading Tuesday.

-By Bob Sechler; Dow Jones Newswires; 512-394-0285; bob.sechler@dowjones.com
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