Kelly: UPS will meet estimates

Jim Kelly, the chief executive of United Parcel Service Inc., said Friday that business conditions have shown some signs of stabilizing and UPS should be able to meet lowered earnings targets for the second quarter.

UPS and its major competitor, FedEx Corp., have been warning investors over the previous six months that the slowdown in the U.S. economy was hitting shipment levels and profits.

UPS has issued two warnings, lowering guidance for three quarters, during the last five months, and FedEx issued its latest warning on Monday, dropping guidance for its fiscal fourth quarter, which ends May 31, and its fiscal first quarter, which ends Aug. 31.

But Kelly stuck by UPS’s second-quarter guidance that it expects to earn at the lower end of a 55-60 cent a share range in the second quarter. Analysts surveyed by First Call had already lowered their forecasts to 55 cents a share for the period.

The company first issued that second-quarter guidance with its March 22 warning, when earnings-per-share forecasts for the period stood at 64 cents. It repeated that guidance when it reported first-quarter results that edged past lower forecasts.

Kelly said volume growth trends through April and early May were essentially the same as the company experienced at the end of the first quarter, “flat-to-slightly negative on the ground (shipments), and up a few percentage points for air deliveries.”