UPS has downscaled its profit outlook for the second quarter ending June 30 due to a combination ofthe slow US economy and soaring fuel costs. The move comes just days after FedEx’s Q4 profit slump
for the same reasons.In a statement, UPS said it expects earnings per diluted share for the second quarter withina range of $0.83-to-$0.88 compared to the $0.97 to $1.04 per share range that it originallyanticipated. UPS will release its second quarter results and hold a conference call on the resultsand outlook for the remainder of the year on July 22.
Slow US economic growth and an unprecedented increase in the cost of fuel have resulted inlower-than-expected US package volume and an accelerating contraction in the use of premium airproducts, the company said. In addition, the anaemic US economy is negatively impacting packagevolume into the United States, affecting results for the International segment. Performance in theSupply Chain & Freight segment is continuing to exceed expectations.
On June 18, FedEx announced a sharp drop in its fourth-quarter and full-year profits due tothe triple impact of soaring fuel prices, the weak US economy and high one-off financial charges.The express giant presented a cautious outlook for the new fiscal year, saying it was difficult topredict earnings for the 2008/09 fiscal year due to the “very volatile and high” fuel prices and anuncertain economic outlook.
