United Parcel Service Inc. executives noted at an investors conference in New York on March 12 a volume decline in February and that meeting earnings guidance for the first quarter may be tough, but said the company is set for long-term growth globally.
UPS Chief Financial Officer Kurt Kuehn told Wall Street analysts and investors several economic indicators recently worsened. The Atlanta-based shipping giant's U.S. package segment experienced a solid January, but volume fell in February almost across the entire customer base.
"If these trends continue through March, our earnings guidance for the first quarter will be difficult to achieve," Kuehn added.
Other areas of the business are performing well. For example, international average daily volume, including U.S. export volume, continues to show strong growth. Kuehn also said the international and supply chain segments remain on target for the quarter. Despite short-term economic challenges, UPS said it still expects earnings for 2008 to be in the range of $4.30 to $4.50 a share.
UPS Chairman and CEO Scott Davis echoed Kuehn's bullish take on the international market.
"Today, only 20-to-30 percent of trade actually crosses a country's borders," Davis said. "By 2025, that statistic is expected to be 80 percent. This means there's a lot of opportunity going forward."
In 2008, UPS plans to expand UPS-owned operations in China, open its new Shanghai hub, buy its package agent in Romania, boost delivery times on thousands of UPS Freight lanes in the United States, add Express morning delivery to five more countries, begin a new air freight product portfolio and receive seven 747-400 jet freighters.
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