UPS Guides Lower, Sees Asia Weakness and More Uncertainty
UPS (NYSE: UPS) lowered its 2012 earnings guidance Tuesday and warned that global economic growth expectations have come down, likely crimping business in the second half.
The package-delivery powerhouse now expects 2012 net income of $4.50 to $4.70 a share. Analysts had been expecting earnings of $4.82 on average. The guidance implies a revenue gain of 3 to 8 percent from last year.
“Increasing uncertainty in the United States, continuing weakness in Asia exports and the debt crisis in Europe are impacting projections of economic expansion," said UPS Chairman and CEO Scott Davis in a statement.
UPS shares traded 3 percent lower in the premarket to $75.49.
For the second quarter, UPS posted adjusted net income of $1.12 billion, or $1.15 a share, up from $1.09 billion, or $1.09 a share a year earlier. The company missed earnings expectations of $1.17 a share, on average.
Revenue rose 1.2% to $13.35 billion. U.S. revenue rose 4.1 percent over the same period last year, driven by a 3.5% gain in package volume. Analysts had been expecting revenue of $13.78 billion.
UPS stated that results in its U.S. domestic and supply chain and freight segments were partially offset by international revenue weakness. Export volume rose 0.8 percent over the same quarter last year. In particular, it saw a double-digit decline in exports from Asia to the U.S. and Europe.
© 2015 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.