NEW YORK (CNN/Money) - United Parcel Service said Wednesday customers began to shift business away from the company last month due to concerns about a possible strike by the Teamsters union, although it reaffirmed its earlier earnings guidance for the second quarter.

The company said it has made "good progress" at the negotiating table with the union in the last 48 hours, although the union issued a statement saying the two sides were still far apart.

The company's stock got some good news Tuesday night when Standard & Poor's said it will be added to the closely-followed S&P 500 July 19. The move will require index mutual funds that track the S&P to buy shares of the company. That helped lift shares of UPS (UPS: Research, Estimates) $3.01, or 5 percent, to $63.75 in pre-market trading on Instinet Wednesday despite the warning about lower business. The shares fell 29 cents in regular-hours trading Tuesday.

Still, the world's largest transportation company faces a contract expiration at 12:01 a.m. ET Aug. 1. The last time its contract expired in 1997 the company was struck for 15 days by more than 200,000 Teamsters, effectively shutting it down in the only national strike in its history.

Customer concerns that they might be stuck without shipping alternatives prompted some to start using competitors in June to build up their volume with the other services to ensure greater access if a strike hits. Competitors such as FedEx Corp. put limits on the amount of new business they would accept during the 1997 strike.

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UPS, which normally handles about 13.6 million packages and documents a day, said its shipping volume in April and May was off 2 percent from the year before, which it said was consistent with the slowing U.S. economy. But it said volume fell 4 percent in June, which it attributed to diversion to competitors, leaving it off 2.6 percent for the quarter.

"We are grateful for the loyalty and confidence demonstrated by our customers," Chief Financial Officer Scott Davis said. "But we've said all along the risk of volume being diverted would increase the closer we got to contract expiration, and diversion will accelerate if there's no agreement soon. It's even more important the company and the union conclude these negotiations in a timely manner."

The news of the shift is not a surprise. FedEx CEO Fred Smith said June 25 that his company had not seen much shift in business through the end of May, but had seen some pickup from UPS customers in the "last few weeks." Still FedEx (FDX: Research, Estimates) gave earnings guidance for the quarter ending in August that was below consensus forecasts.

The company said it still expects to meet its earlier earnings per share guidance of between 50 and 55 cents for the quarter. Analysts surveyed by earnings tracker First Call had a consensus earnings forecast of 54 cents, with a range of 48 to 60 cents. The company earned 55 cents a share a year ago.

UPS and union both had been suggesting until recently that they were making progress at the negotiations, and most analysts had said they did not expect a strike this time around. But Tuesday, Teamsters General Secretary-Treasurer Tom Keegel said the two sides were far apart on issues such as health care and pensions.

"We are dealing with one of the most profitable corporations in America. This is not a company in decline," Keegel said in a message to members Tuesday after a negotiating session. "We expect proposals that protect our health coverage and our pensions."

The union said it would make a counter-offer Wednesday to the company's latest economic offer.