UPS warned yesterday that it expects slower growth in 2007 than last year, prompting a sharp dropof 4.4% in its share price during trading yesterday. The stock closed down 1.3%, which is the
largest closing price fall in the last three months.UPS CFO Scott Davis said in media interviews following the release of the 2006 and Q4 figuresthat the first half of the year would be “somewhat flat”. But UPS expects the moderating US economyto pick up again by late 2007 or early 2008. Analysts described the cautious outlook for 2007 as”disappointing”.
Davis also confirmed that about 90% of the planned 1,200 job reductions designed to cut $100million worth of costs at the Supply Chain Solution division had been completed, but further joblosses could follow in administrative and operational areas.
UPS had earlier reported strong financial results for 2006 and the fourth quarter, withgrowth driven mostly by its international business. UPS said that the fourth quarter produced solidearnings growth despite a slowing US economy.
