NEW YORK – The huge cost of ensuring timely deliveries cost UPS during the holidays and the shipping company is now cutting its outlook for the year.
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Shares plunged nearly 10 percent in premarket trading Friday.
The Atlanta company hired more workers and boosted capacity at its facilities during the busy holiday season to avoid a repeat of 2013, when shippers struggled with a deluge of orders.
UPS Inc. now expects 2014 earnings of $4.75 per share, down from its previous forecast of between $4.90 and $5 per share. Industry analysts had been looking for earnings of $4.96 per share, according to FactSet. For the fourth quarter, UPS expects earnings of $1.25 per share, well below the $1.47 per share analysts had projected.
Shares of FedEx Corp. are down more than 2 percent.