UPS Holiday Fiasco To Hit Fourth Quarter Earnings

(RTTNews) - United Parcel Service (UPS) on Friday lowered its 2013 earnings view, blaming rough December weather and problems delivering a massive rush of holiday packages.

Along with rival Federal Express (FDX), UPS suffered an embarrassing backlog of deliveries due to unprecedented levels of online shopping that included a surge of last-minute Christmas orders.

Despite fourth quarter performance, the company said it is confident of its 2014 outlook.

On December 23, UPS delivered more than 31 million packages, the most ever and 13% over the prior-year peak day. Still, thousands of packages were reportedly not delivered in time for the holidays.

UPS was forced to spend on "extraordinary measures deploying additional equipment and people," including hiring 30,000 more temporary workers than planned.

The UPS Facebook page was flooded with complaints, and mega-customer Amazon (AMZN) was among other retailers compelled to offer gift cards to customers whose packages didn't make it on time.

UPS now says that it anticipates fourth quarter 2013 earnings per share of $1.25. Analysts polled by Thomson Reuters expect the company to report earnings of $1.43 per share for the fourth-quarter. Analysts' estimates typically exclude special items.

Looking ahead for full-year 2013, the company now expects adjusted earnings per share to be $4.57, lower than $4.65 to $4.85 per share projected earlier. Analysts project annual earnings per share of $4.75.

On a reported basis, 2013 earnings are expected to be $4.61 per share.

It expects full-year 2014 earnings per share to grow in line with its long term targets of 10-to-15%, compared to 2013 adjusted results. Analysts expect the company to report earnings of $5.49 per share for fiscal 2014.