UPS reduces fourth quarter earnings guidance

Citing a compressed peak season and what it described as an unprecedented level of online shopping that included a surge of last-minute deliveries, UPS reduced its fourth quarter earnings guidance.

By ·

Citing a compressed peak season and what it described as an unprecedented level of online shopping that included a surge of last-minute deliveries, UPS reduced its fourth quarter earnings guidance today.

UPS said it is calling for fourth quarter 2013 earnings per share of $1.25, with full-year 2013 earnings per share expected to come in at $4.57, which is below its previous guidance of $4.65 to $4.85.

The company saw a fair amount of customer angst in regards to late deliveries for orders made online that did not reach their destinations in time although industry estimates suggest it was not a high percent of its total package volumes.

The company’s peak day, December 23, saw UPS deliver more than 31 million packages, which stands as its highest day ever, and 13 percent higher than its 2012 peak day. Company officials said that this year’s peak delivery day was six days later than expected and topped its forecast for volume by 7.5 percent.

Jerry Hempstead, president of parcel consultancy Hempstead Consulting, said that this earnings guidance is due in part to the method and means UPS took to keep its network moving that was the result of the storm that hit Texas in mid-December, explaining that multiple UPS hubs in Texas were affected.

“The other thing that goes out the window is overtime pay so all constraints had to be tossed out the window as late arrivals and high volumes took its toll,” he said. “In the end it’s weather and [the situation is] non recurring. I think UPS did an outstanding job in its attempt to maintain service through some adverse conditions.”

The company’s fourth quarter earnings announcement is on January 30.


About the Author

Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Article Topics

E-commerce · UPS · All Topics
Latest Whitepaper
The View from the New “Single Window”
The single window, officially known as the "International Trade Data System," operates via the Customs and Border Protection (CBP) agency's Automated Commercial Environment (ACE) platform, and serves as a single point of contact for all trade filings.
Download Today!
From the March 2017 Issue
WMS vendors are stepping up to the plate and developing functionalities and solutions that meet the complex needs of today’s companies. Our top analysts take a peek into these developments and discuss the DC of the future and the software that will support it.
5 Supply Chain Trends Happening Now
2017 Warehouse/DC Equipment Survey: Investment up as service pressures rise
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
2017 Trucking Regulations & Infrastructure Update
In this session our panel brings shippers up to date on the state of transportation regulations. Discussion will revolve around regulatory reform, aspects of the federal highway bill and what the transportation landscape looks like in the early days of the Trump administration.
Register Today!
EDITORS' PICKS
LM Exclusive: Major Modes Join E-commerce Mix
While last mile carriers receive much of the attention, the traditional modal heavyweights are in...
ASEAN Logistics: Building Collectively
While most of the world withdraws inward, Southeast Asia is practicing effective cooperation between...

2017 Rate Outlook: Will the pieces fall into place?
Trade and transport analysts see a turnaround in last year’s negative market outlook, but as...
Logistics Management’s Top Logistics News Stories 2016
From mergers and acquisitions to regulation changes, Logistics Management has compiled the most...