said its first-quarter profit met Wall Street's estimates, but with the expectation that the economy will continue to slow, the package shipper reduced its second-quarter and full-year targets.
The company earned $906 million, or 87 cents a share, in the quarter, and that was in line with estimates. A year earlier, earnings were 96 cents a share, excluding items.
Revenue rose 6.5% year over year to $12.7 billion. Analysts surveyed by Thomson Financial had estimated $12.3 billion.
"U.S. economic activity deteriorated more rapidly than expected during the quarter," said CEO Scott Davis, in a prepared statement. "UPS has successfully managed its operations through many economic cycles, and we will do so again."
Still, the company sounded a cautious note regarding its economic outlook. "We see no signs of economic strengthening in the second quarter," said CFO Kurt Kuehn, in a prepared statement. "Most forecasters are projecting that current anemic conditions will prevail for the remainder of the year."
UPS is looking for second-quarter earnings between 97 cents and $1.04 a share. Analysts had estimated $1. For the full year, UPS expects earnings of $3.90 to $4.20 a share, while analysts are calling for $4.17.
On the domestic package side, daily volume fell by 0.3% and customers shifted from away from premium products. Operating profit fell to $959 million from an adjusted $1.15 billion last year. Meanwhile, international package profit fell to $421 million from $440 million, partially because the timing of the Easter holiday resulted in two fewer operating days in Europe.
During the quarter, UPS bought back 17.4 million shares at a cost of $1.24 billion, leaving $8.9 billion of the authorization remaining for purchases UPS expects to complete by the end of 2009.
Shares of UPS were losing 1% in premarket trading. Rival
wasn't trading ahead of the open.