NEW YORK (CNN/Money) - United Parcel Service Inc. said Tuesday the shift of freight by customers worried about a possible Teamsters strike will cause third-quarter earnings to come in below current forecasts.

The union and company reached a tentative agreement July 15, about two weeks before the contract expiration. But UPS said the diversion of freight in July cost it about 4 or 5 cents a share in third-quarter earnings, and because of that it now expects to earn 50-to-55 cents a share in the period, compared with 50 cents a year earlier.

Analysts surveyed by earnings tracker First Call expected earnings of 56 cents a share in the current period.

The new guidance sent shares of UPS (UPS: down $0.96 to $62.15, Research, Estimates) lower in early trading Tuesday.

The company said some customers who shifted business as a precaution have returned since the strike threat has passed. But it said domestic volume for the entire third quarter should fall slightly below last year's level of 13.1 million packages a day handled throughout the quarter.

UPS said that assuming overseas trends continue and the United States experiences an economic recovery, the company should do better than its historical earnings growth average of 13 percent in 2003. Analysts already had forecast growth of about 16 percent next year, with a consensus of $2.58 a share, up from the current 2002 full-year EPS forecast of $2.23.

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The company also disclosed additional information about second-quarter financial results, after it released partial earnings earlier in the month in order to facilitate its shares being added to the Standard and Poor's 500 index after the market close July 19.

The company already had reported net income of $611 million, or 54 cents a share, in line with First Call's forecast but down from the $630 million, or 55 cents a share, earned a year earlier, as revenue rose 2.5 percent to $7.68 billion.

UPS said Tuesday that domestic revenue fell 1.2 percent to $5.9 billion as U.S. domestic package volume declined 2.6% for the quarter. The shift of freight by customers in advance of the labor pact was felt first in June, when volume fell 4 percent. Domestic shipments were down across all the levels of service -- next-day air, deferred and ground shipments.