UPS Issues Earnings Warning
ATLANTA (AP) _ Blaming a slowing economy, United Parcel Service warned Thursday that flat shipping volume would cause its fourth quarter earnings to be lower than expected. The company said it still expects to meet its 2000 financial targets.
The busiest days of the holiday season occur next week, but UPS said it saw an ``unusual slowdown″ in domestic customer shipments that contributed to flat volume for the two weeks ending Dec. 8.
The Atlanta-based company said it expects to earn 60 to 62 cents per share for the fourth quarter, down from the 64 cents per share forecast by analysts surveyed by First Call/Thomson Financial. UPS earned 56 cents per share during the same quarter last year.
UPS now expects earnings per share to grow 7 percent to 10 percent for the fourth quarter, instead of the previous 13 to 14 percent. For the full year, UPS expects revenue to increase 10 percent and income to increase in the ``mid-teens.″
UPS shares fell 5.5 percent on the news, down $3.44 to $58.19 in morning trading Thursday on the New York Stock Exchange.
The earnings revision follows slowing growth in domestic volume in October and November to 4 percent, compared with 5.5 percent growth for the first nine months of the year.
Kurt Kueh, vice president of investor relations, said the company was ``a little surprised by the severity of the slowdown.″
``It’s hard to know what it is,″ Kuehn said. ``Are people just being a little closer with ... their wallets this season or is it the drama of the uncertain presidential election or what?″
The company expects to deliver 325 million packages between Thanksgiving and Christmas, including 19 million on Tuesday, its busiest shipping day.
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