MarketWatch: UPS Drops (earnings outlook) Bomb After Hours

[marmar]

UPS slashes its profit outlook due to fuel, economy
By Matt Andrejczak, MarketWatch

Package shipper, an economic bellwether of sorts, says it's slashing earnings outlook due to fuel costs and lower package volume.


SAN FRANCISCO (MarketWatch) -- United Parcel Service Inc. said late Monday that it was slashing its second-quarter profit outlook, squeezed by soaring fuel prices and a sluggish U.S. economy.

It marks the second straight quarter that the company has warned it would not meet prior profit expectations. Its stock fell 4% in late trading.

The package-delivery giant cut its second-quarter profit forecast to a range of 83 cents to 88 cents a share. In late April, UPS had expected to earn between 97 cents and $1.04 a share. Since then, crude prices have surged from $110 to $136 a barrel.

On average, Wall Street analysts are expecting UPS to earn 99 cents a share in the second quarter, according to a FactSet Research. The shipper will issue earnings July 22.

UPS said slow U.S. economic growth has slowed package volume in the United States and curbed sales of its premium air-delivery services. Shipments into the United States also have been affected, hurting its international-business unit.

Last week, rival FedEx Corp. also issued a profit forecast well below Wall Street expectations.

Stocks of both companies have performed in line with the broader market. UPS shares are down 6% so far this year, while FedEx is down 10%. By comparison, the S&P 500 Index is off 10%.


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[Mountainman]

1. if transportation companies are hurting like this wouldn't you think they would push for more fuel

efficient vehicles? High gas prices are not just hurting the commuter.