UPS Cuts Full-Year Earnings Forecast
UPS Inc. said Friday it is reducing its full-year earnings forecast, citing a slowing U.S. economy.
The parcel and freight carrier said its second-quarter earnings will be $1.13 per share and that it was lowering its full-year guidance to $4.65 to $4.85 per share, down from its previous forecast of $4.80 to $5.06.
UPS cited “overcapacity in the global airfreight market, increasing customer preference for lower-yielding shipping solutions and a slowing U.S. industrial economy” as factors lowering its revenue and operating profit below expectations.
“We expect the second-quarter market trends to persist, and UPS is adapting to meet these conditions,” Chief Financial Officer Kurt Kuehn said.
The lowered full-year revision would be a 3% to 7% increase over last year’s earnings, Kuehn said in a statement. UPS is scheduled to release its second-quarter earnings on July 23.
The company also said it had “experienced some slowing in package volume growth as a result of labor negotiations.”
UPS recently reached agreement with the Teamsters union for its more-than 200,000 parcel employees but is still working out a labor pact for union-represented workers at its less-than-truckload UPS Freight unit.
UPS is ranked No. 1 on the Transport Topics Top 100 listing of U.S. and Canadian for-hire carriers.
