United Parcel Service (NYSE:UPS) shares fell 5.3% Friday morning after the world’s biggest package delivery company slashed its 2013 outlook, as a weakening U.S. economy weighed on second-quarter performance.
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The company said adjusted earnings are expected to fall to $1.13 a share in the second quarter. That would reflect the first quarterly earnings decline for UPS in more than three years.
Profit for the full year is now projected to grow between 3% and 7%. UPS lowered its forecast for adjusted earnings to $4.65 and $4.85 a share, compared to its previous estimate of $4.80 to $5.06. Wall Street was looking for $4.98 a share.
UPS and rival FedEx (NYSE:FDX) are considered economic bellwethers since they ship goods worldwide. The companies are facing headwinds as consumers seek less expensive shipping options.
“We expect the second quarter market trends to persist and UPS is adapting to meet these conditions,” UPS Chief Financial Officer Kurt Kuehn said in a statement.
Shares were trading at $86.57, down $4.88. As of Thursday’s close, the stock was up 24%.
FedEx also slipped Friday morning, as the shares fell 1.7% to $102.59.