Economic Bellwether UPS Just Slashed Earnings

Global shipper UPS just reported preliminary earnings of $1.13 per share in the second quarter, below consensus estimates for $1.20 EPS, and lowered its guidance for full-year earnings as well.

The company cites several factors expected to weigh on earnings when the company officially reports its Q2 results on July 23:

UPS (UPS) today announced that second quarter diluted earnings per share are expected to be $1.13. Overcapacity in the global air freight market, increasing customer preference for lower-yielding shipping solutions, and a slowing U.S. industrial economy drove revenue and operating profit below expectations. In addition, UPS experienced some slowing in package volume growth as a result of labor negotiations.

“We expect the second quarter market trends to persist and UPS is adapting to meet these conditions,” said Kurt Kuehn, UPS Chief Financial Officer. “Despite downward revisions to economic forecasts for the second half of the year, we anticipate solid profit growth. However, we are reducing guidance for 2013 adjusted diluted EPS to a range of $4.65 to $4.85, a 3 - 7% increase over last year.”

Shares of UPS are down 4% in pre-market trading.