UPS, FedEx Shares Fall as UPS Cuts Outlook
In a press release Friday, UPS (NYSE: UPS) lowered its EPS guidance for fiscal year 2013 from the previous $4.65-$4.85 range to $4.57. Despite this change, UPS said it remains confident for 2014 with an estimated EPS growth rate of 10-15 percent for the year.
UPS also offered some insight into the fourth quarter, saying EPS are expected to be around $1.25. The consensus estimate coming out of analysts on UPS is $1.43.
Although more detailed information will be released in the earnings report on January 30th, the company has attributed high expense to an unexpected level of business during the holiday season.
UPS said “In an effort to maintain service standards and commitments, UPS took extraordinary measures deploying additional equipment and people. For example, the company utilized 85,000 temporary employees, 30,000 more than planned. Also, weather events in December weighed on results.”
On December 23, UPS set a record of 31 million deliveries, 13 percent higher than the same day a year prior. In order to maintain service standards, the company took on 30,000 more temporary employees than it had expected to.
Reacting to this news, UPS shares are down about 2 percent at last check.. Direct competitor Fedex (NYSE: FDX) has dropped about a half percent.
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