UPS affirms on 1Q, warns on 2Q
Parcel delivery company sees growth, but gives 2Q outlook at or below estimates.
February 26, 2002: 12:31 p.m. ET
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NEW YORK (CNN/Money) - United Parcel Service Inc. reaffirmed its earlier profit guidance for the first quarter, although it gave a second-quarter earnings outlook at or below current Wall Street expectations.
The world's largest transportation company, which had given a series of earnings warnings for the last 15 months due to slowing of the U.S. economy, predicted earnings-per-share growth throughout the year. It said it now expects first-quarter earnings per share to be at the high end of January guidance of 40-to-47 cents. Analysts surveyed by earnings tracker First Call are forecasting earnings per share of 46 cents, with a range of estimates from 42 cents to 50 cents.
UPS also said it expects second-quarter EPS of 50-to-55 cents. That would be at or below the current consensus forecast of 55 cents, with analysts' estimates ranging from 50 cents to 60 cents in the period.
The company faces the possible loss of some business later this year if customers shift shipments to competitors as a precaution of a possible August strike by the Teamsters. The union shut down the company for two weeks in August 1997, but that was the company's first nationwide work-stoppage, and company executives have said they believe they can reach an agreement this time without any disruption.
The company said assuming there is a "timely completion of labor negotiations with the Teamsters union and a strengthening economy," that the second half of the year should see the earnings increase percentage in the low teens.
The company earned 50 cents a share in the third quarter of last year and 57 cents in the fourth quarter. First Call's forecast calls for third-quarter EPS of 59 cents and fourth-quarter EPS of 64 cents. Those forecasts would put second-half EPS growth at 15 percent.
Shares of UPS (UPS: up $0.73 to $57.83, Research, Estimates) were trading higher in early-afternoon trading following the new guidance. 
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