UPS Chief Sees 'Less Robust' Shipments
ATLANTA (Reuters) – United Parcel Service Inc. (NYSE:UPS – news) Chairman and Chief Executive James Kelly said on Tuesday that the world’s largest package delivery company’s fourth-quarter shipping activity would be “less robust” than expected earlier following the September attacks on the United States.
“There’s a great deal of uncertainty” since the attacks on the World Trade Center and Pentagon (news – web sites), Kelly, who is expected to retire in January, told Reuters. “The fourth quarter will be less robust than we expected in early September.”
Earlier this month, when UPS reported a 19 percent decline in third-quarter earnings, it said it saw fourth-quarter profit in the range of 45 cents to 55 cents a diluted share, down from 63 cents a year earlier. Current analyst estimates range from 46 cents to 55 cents, with a mean of 50 cents, according to research firm Thomson Financial/First Call.
Hurt by the shutdown of the U.S. air system after the attacks, UPS said its domestic air and ground package volume through mid-October was 3 percent to 4 percent below year-earlier levels.
UPS rival FedEx Corp. (NYSE:FDX – news), the No. 1 express shipper, said on Monday that express shipments for the second quarter ending in November would likely be down 11 percent from a year earlier. Still, it said earnings for the period would top most forecasts as growth at its ground freight business offset losses after the attacks.
Kelly, who spoke at a National Minority Supplier Development Council conference in Atlanta, also said UPS was not expecting a significant effect on its business from the current anthrax scare gripping U.S. Postal Service operations. ”Anthrax has been a letter issue, not a package issue,” Kelly said.
In New York Stock Exchange (news – web sites) trading around midday on Tuesday, UPS shares eased 96 cents, or 1.9 percent, to $49.88. FedEx shares were down 74 cents, or about 2 percent, at $40.12.
