UPS (NYSE:UPS) reported earnings for the fourth quarter and the full year yesterday. Did the company deliver solid results?

You bet. Total sales revenue for Q4 rose 21.5% to nearly $12 billion, benefited by the holiday season. Operating income jumped 24.3% to $1.7 billion. Net income came in at $1.05 billion ($0.95 per diluted share), versus $933 million ($0.82 per diluted share) in the year-ago period. That's good for a gain of 12.4%. These results are adjusted, and they account for charges relating to aircraft impairment, tax issues, and pension benefits realized in last year's quarter.

But wait, there's more stuff on the truck. Total sales revenue for the entire year rose 16.4% to $42.6 billion. Operating income increased 19% to $6.1 billion. Net income for 2005 was $3.9 billion ($3.47 per diluted share) versus $3.3 billion ($2.90 per diluted share) in 2004, which represents earnings growth of 17.2%. Again, these are the adjusted earnings based on the aforementioned accounting elements.

What can Brown do for you? It can serve up a pretty good quarter. U.S. domestic package sales rose 8.9%, while international did really well, rising over 18.3%. Supply chain and freight revenues more than doubled.

Free cash flow for the year was flat at $3.5 billion. UPS has an enterprise value of approximately $86 billion, so the ratio of enterprise value to trailing free cash flow shows the company at roughly 25 times free-cash generation. It would be ideal to get in at a lower free-cash multiple, but if the company can continue its growth in its delivery segments, then the price might not be so bad for this premier brand. (Remember that both the company and the analyst community expect double-digit earnings growth rates for the foreseeable future.) Another thing to consider: the current yield of roughly 1.8%. UPS has a cool dividend history; its payout has just about doubled in the last five years. Value investors may want to patiently wait for a more prosperous yield.

Long-term investors can expect UPS' performance to fluctuate on an ongoing basis with the economy, consumer spending, and energy prices. The company is generating good growth in its top-line sales base, and it's throwing off a healthy amount of cash. Based on the current amount of shares outstanding, and the current dividend of $0.33 per share, UPS spends approximately $1.5 billion on shareholders -- that statistic relates appropriately to the free-cash generation.

In summation, look at UPS as a long-term holding; don't be frightened by short-term machinations in the marketplace. It'll react to oil prices and things of that nature -- including formidable competition from the likes of Motley Fool Stock Advisor pick FedEx (NYSE:FDX) -- but it's a trusted brand in the delivery business that should be with us for a long time into the future. Keep an eye on the dividend and free cash flow to make sure this stock remains stable, and consider adding to your position whenever the stock offers cheaper values.

Please sign for these related Takes:

Have an opinion? Set it on the doorstep of the UPS discussion board.

Fool contributor Steven Mallas owns none of the companies mentioned. The Fool has a disclosure policy.