Tag: UPS

UPS will have some explaining to do when it releases its fourth-quarter earnings Thursday. The package delivery giant cut its forecast two weeks ago, citing weather issues and sluggish demand in the last week of the year. The explanation left analysts unconvinced. “We expect UPS management to admit several planning and execution shortfalls,” said Bear Stearns analyst Edward Wolfe. UPS is projected to earn 76 cents a share, up 8 percent from the year-earlier period. Sales are pegged at USD9.76 billion, up 9 percent from the same time last year, according to analysts. Before it lowered its forecast, the company had targeted a profit in the range of 83 cents to 87 cents a share. Shares of UPS have slipped over 8 percent since the Jan. 11 announcement that sparked two downgrades. So what’s gone wrong? Analysts sense rival FedEx is nipping at the heels of UPS in the ground delivery business. And DHL is looking to take market share as well, undercutting UPS on price. In addition, UPS might be running into problems rolling out new technology to deliver packages. When completed, the overall is expected to save the company USD600 million a year.

United Parcel Service, the package delivery giant, yesterday cut its forecast for fourth-quarter earnings, blaming lower-than-expected volume and stormy weather during the peak Christmas period. The profit warning punctured the optimism that has surrounded the express delivery industry in recent months, which had benefited from a growing US economy and surging trade with Asia.
However, FedEx, the largest package delivery company after UPS, said it had experienced “a strong holiday season” and reaffirmed its existing profit guidance. UPS portrayed its problems as a short-term blip and reaffirmed its “positive” outlook for this year. UPS said fourth-quarter earnings-per-share were now expected to be 75-76 cents, down from an earlier guidance of 83-87 cents.