UPS likely to miss its quarterly forecast
The world's largest shipping firm plans to switch focus from U.S. market to global growth.
ATLANTA - UPS Inc. may not meet its first-quarter earnings guidance and plans to focus on growth opportunities overseas because of the uncertain U.S. economy, officials of the world's largest shipping carrier said yesterday.
The disclosures came at an investor conference in New York that was broadcast on the Internet.
Chief executive officer Scott Davis said the Atlanta company still considered its domestic market to be important to its future. UPS employs 10,000 in the Philadelphia area and has a large distribution center near Philadelphia International Airport.
U.S. "economic forecasts for this year are uncertain at best," Davis said. Thus, he said, the company could not rely on U.S. package-volume growth alone. International growth will become more important in the future, he said.
"One of our real strengths is our balanced global presence," Davis said.
China, India and Europe provide good growth opportunities for UPS, said David Abney, the company's chief operating officer.
The need for more international growth was underscored when chief financial officer Kurt Kuehn disclosed during the conference that UPS may not meet its first-quarter financial guidance because of the slowing U.S. economy.
Kuehn said the first three weeks of January saw strong volume growth, but that was followed by six weeks of declining volume.
He said that if the recent trends continued through March 31, the end of the first quarter, the guidance the company previously gave would be difficult to achieve. Kuehn said UPS remained comfortable with its annual guidance.
UPS said Jan. 30 that earnings per share for the first quarter were expected to be within the range of 94 to 98 cents. For the full year, UPS said at the time, it expected earnings per share to be between $4.30 and $4.50.
UPS shares closed down 85 cents yesterday at $71.94 in New York Stock Exchange trading.
Davis said yesterday that UPS also would continue to use technology to improve efficiency and financial results. He said growing Internet commerce offered more opportunities for UPS.
"I am confident we can deliver long-term results," Davis said.