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Wed, Jun 25, 2008 - Page 10 News List

UPS lowers profit expectations for the second quarter

AP , ATLANTA

United Parcel Service Inc (UPS), the world’s largest shipping carrier, lowered its earnings expectations for the second quarter on Monday because of slowing US economic growth and high fuel costs.

The Atlanta-based company said it expected earnings per share for the second quarter to be within a range of US$0.83 to US$0.88, compared with the US$0.97 to US$1.04 the company originally anticipated.

Analysts surveyed by Thomson Financial were expecting UPS to post earnings of US$0.97 a share in the second quarter.

UPS said the slowing US economy and record fuel prices have resulted in lower-than-expected US package volume and reduced use of premium air products.

UPS’ second quarter ends on June 30. It will report its results for the three-month period on July 22.

UPS is able to pass higher fuel costs on to customers in the form of a fuel surcharge on shipments. However, the surcharge increases haven’t kept pace with rapidly rising fuel prices.

In April, as part of its first-quarter earnings release, UPS lowered its earnings guidance for the year and projected the weak US economy would continue to affect the company in the second quarter.

It acknowledged on Monday that the current quarter has been even tougher than it anticipated just a few months ago.

At the time of the first-quarter earnings release, UPS lowered its earnings expectations for the full year to between US$3.90 and US$4.20 a share.

Previously, UPS said it expected earnings per share to be between US$4.30 and US$4.50 for the year.

UPS did not update the projection on Monday to reflect any impact its lower expectations for the second quarter might have on its full-year results.

UPS shares fell US$0.11 to US$66.26 in trading on Monday. In after-hours trading, its shares fell US$2.81 to US$63.45.

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