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UPS Slashes Its Profit Forecast

The weak economy takes its toll on delivery volume.
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Updated from 4/08/08


(UPS) - Get United Parcel Service Inc. Report

cut its first-quarter earnings forecast, citing continued economic weakness.

The Atlanta-based package delivery titan said Tuesday that it now expects to earn 86 cents to 87 cents a share, below a previous forecast of 94 share to 98 cents a share.

Analysts were expecting earnings of 94 cents a share, according to a poll by Thomson Financial.

The company said CFO Kurt Kuehn told an investor conference on March 12 that its profit guidance would be "difficult to achieve" if lower volume trends seen in February seeped into March.

"The U.S. economy has continued to weaken, causing a reduction in domestic package volume and a shift away from premium products. Significantly increased fuel costs in the quarter also contributed to the lower-than-expected results," the company said in a press release Tuesday.

Shares of UPS were off $2.84, or 3.9%, to $70.47 in recent after-hours trading.

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