UPS Looks Globally for Growth
(03-12) 07:37 PDT ATLANTA, (AP) —
UPS Inc. may not meet its first-quarter earnings guidance and plans to focus more on growth opportunities overseas because of the uncertain U.S. economy, executives of the world’s largest shipping carrier said Wednesday.
The disclosures came at an investor conference in New York that was broadcast on the Internet.
CEO Scott Davis said the Atlanta-based company still considers its domestic market to be important to its future.
But he noted that U.S. “economic forecasts for this year are uncertain at best.” Davis said the company can’t rely on U.S. package volume growth alone. International growth will become more important in the future, he said.
“One of our real strengths is our balanced global presence,” Davis said.
China, India and Europe provide good growth opportunities for UPS, said David Abney, the company’s chief operating officer.
The need for more international growth was underscored when Chief Financial Officer Kurt Kuehn disclosed during the conference that UPS may not meet its first-quarter financial guidance because of the slowing U.S. economy.
Kuehn said the first three weeks of January saw strong volume growth, but that was later followed by six weeks of negative growth.
He said that if the recent trends continue through the end of the first quarter on March 31, the guidance the company previously gave will be difficult to achieve. Kuehn said UPS remains comfortable with its annual guidance.
UPS said Jan. 30 that earnings per share for the first quarter were expected to be within the range of 94 cents to 98 cents. For the full year, UPS said at the time that it expects earnings per share to be between $4.30 and $4.50.
UPS shares fell $1, or 1.4 percent to $71.79 in morning trading Wednesday.
Davis said Wednesday that UPS also will continue to use technology to improve efficiency and financial results. He said growing Internet commerce offers more opportunities for UPS.
“I am confident we can deliver long-term results,” Davis said.
Last month, UPS said a bookkeeping error caused it to inflate its reported earnings for the fiscal 2007 fourth-quarter and full-year by $65 million.
The error meant the company missed Wall Street expectations instead of meeting them, as reported previously.
It revised its results, which it first reported on Jan. 30, to fix the discrepancy.
UPS expects to make $3 billion in capital expenditures in 2008, at the low end of its historical range.
The company has said this year will involve both challenges and opportunities for UPS, also known as United Parcel Service.
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