UPS Falls Short On Holiday Shipping-Shares Down In 4th Qtr

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The United Parcel Service reported that preliminary fourth-quarter earnings forced them to hire more temporary workers during the holiday rush. UPS planned for the spike in shipping but failed as they missed on holiday deliveries. Analyst estimates were off on this one.

UPS analysts estimated that their earnings would be around $1.43 a share for the 4th quarter, but shares were reported at only $1.25 a share. Atlanta-based UPS expects to report an adjusted profit of $4.57 a share for 2013, which is below its prior projection of $4.65 to $4.85. Analysts anticipated $4.75 on average. UPS will report results on Jan. 30th

The shipping company, which plans year-round for the holiday season, was overwhelmed when the volume of last-minute air shipments exceeded its total capacity to process them. The inconvenience forced UPS to hire 85,000 temporary workers. This was more then 50% of their original plan. It was a little too late though as many packages arrived to their destinations late. On their highest day of the year, UPS delivered more then 31 million packages!

While UPS shipping fail, Fed Ex reached new all-time highs. The big boost in online sales and the failure of UPS helped Fed Ex reach new highs in total shipments. Both companies and others plan throughout the year for the busy holiday shipping season. There’s a clear winner and loser, need I say more?
Despite the holiday gains, FedEx stocks fell by less then 1 percent to $143.33  a share. UPS fell by 2 percent to $98.50 per share. With a report due at the end of the month, we may see the stock fall further. As for FedEx, they remain to be a strong stock. Only time will tell.