| As of Thursday, August 20th: |
Since the start of the quarter, the Q2 growth rate has risen from -31.1% to -27.8%. (Data provided by Thomson Reuters)
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United Parcel Service, the world's largest package delivery company, Thursday gave a low outlook for the current quarter citing continued economic weakness, but said its domestic and global businesses appeared to be stabilizing.
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Chris Gardner / AP |
Like its main rival FedEx [FDX
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], UPS is considered to be a bellwether of U.S. economic activity. The company anticipates third-quarter earnings per share of 45 cents to 55 cents, versus the analyst view of 59 cents.
"Declines in both our domestic and international businesses appear to be stabilizing, but volumes will remain significantly below last year's levels," Chief Financial Officer Kurt Kuehn said in a statement.
"Although declines in economic indicators are less dramatic than earlier in the year, questions remain as to when business activity will begin to strengthen," he said.
The Atlanta-based company [UPS
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] on Thursday reported second-quarter net income of $445 million, or 44 cents a share, down more than 49 percent from $873 million, or 85 cents a share, a year earlier.
Excluding an after-tax charge of $48 million, earnings per share totaled 49 cents, matching analyst predictions. Revenue fell to $10.8 billion from $13.0 billion a year ago. Analysts expected $11.1 billion.
On a conference call with analysts, UPS said the pricing environment for packages remains "rational" despite the recession, but that it had not seen any uptick in demand from small businesses. Small businesses are the backbone of the U.S. jobs market and are considered by some analysts to be an important indicator for a broader economic rebound.
Last month, FedEx reported a wider quarterly loss and noted the next two quarters would be "extremely difficult," but added that the pace of economic decline appeared to be slowing.
In morning New York Stock Exchange trading, UPS shares were down slightly.
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Sears Holdings badly missed expectations Thursday, when it posted a loss per share of 17 cents excluding items for the second quarter, as its US comparable store sales fell by 8.6 percent on aggregate.
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Data is a real-time snapshot *Data is delayed at least 15 minutes