UPS says slowing economy impacting growth

A slowing North American economy, harsh winter weather, continuing weakness in the value of the Euro, softening cargo revenues, and high utility costs are the factors contributing to reported lower first quarter earnings, says United Parcel Service. The company expects first quarter earnings to be in the range of $0.49 to $0.51 per share, which compares to earnings of $0.56 per share during the prior year period.

UPS says that while it will show volume increases across all products for the full quarter, domestic volume growth has slowed during the last two months to approximately one per cent.

In contrast, international export package volume has remained strong, growing more than 15% so far in the quarter.

“We anticipated the first quarter would be difficult and thought we could achieve earnings per share slightly above last year. But even in a slow economy, we anticipate modest increases in domestic volume and in revenue per piece. In addition, our logistics and international businesses have continued to show strong growth” says Scott Davis, UPS Chief Financial Officer.