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 The world's No.1 package delivery company's shares fell as much as
3.5 percent in early morning trading on Friday.
UPS said it delivered more than 31 million packages on December 23 —
its highest ever and 13 percent more than the prior-year peak day.
However, the "highest delivery day" occurred six days later than
expected and was 7.5 percent greater than planned, UPS said on
Friday.
"We think UPS did a poor job forecasting the holiday season," S&P
Capital IQ analyst Jim Corridore wrote in a note.
The courier company said on December 25 it was overwhelmed by a high
volume of holiday packages, delaying the arrival of Christmas
presents around the globe.
Cold weather coupled with six fewer days between Thanksgiving and
Christmas pushed Americans to shop more towards the end of the
season, when discounting was at its peak.
UPS said the level of online shopping towards the end of December
was unprecedented.
Shipment volume and forecasts at UPS, along with rival FedEx Corp <FDX.N>,
are closely watched by Wall Street and considered an indication of
overall economic health because of the vast amount of goods they
transport.
UPS has also been hurt by retailers cutting back express shipping.
This reduces costs for manufacturers, but hurts courier companies
like UPS, which make more money on faster shipping.
The company said on Friday it expects full-year earnings of $4.57
per share, below its previous forecast of $4.65-$4.85.
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UPS expects a profit of $1.25 per share for the fourth quarter ended
December 30.
Analysts on average expected earnings of $1.43, according to Thomson
Reuters I/B/E/S.
The company said it was confident of its 2014 outlook. UPS expects
full-year diluted earnings to rise by 10-15 percent, implying a
profit of $5.02-$5.26 per share. Analysts were expecting $5.48.
Corridore said he expects the company to be more prepared this year
as online shopping continues to grow.
UPS is scheduled to report results on January 30.
(Reporting by Sagarika Jaisinghani in
Bangalore; editing by Joyjeet Das)
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