UPS reported that its third quarter profits are down 43%. UPS earning reflect economic activity in the U.S. because it ships half of all packages sent, from clothing to documents to medical supplies.
UPS is the world's largest delivery company.
Net income slid to $549 million, or 55 cents a share, from $970 million, or 96 cents, a year earlier, Atlanta-based UPS said today in a statement. Revenue fell 15 percent to $11.2 billion.
UPS is considered a proxy for the U.S. economy because it handles half of all packages sent, ranging from auto parts and medicine to financial documents and clothing. UPS's Ground unit volume slid 6.2 percent as a competing service from FedEx Corp. took away some deliveries, said Donald Broughton, an analyst at Avondale Partners LLC in Nashville, Tennessee. He rates the shares "market perform."
"Ground is the bread and butter of UPS and if that's down, it's not good," he said. "The underlying business was weaker than we expected."
UPS hired 60,000 temporary workers for Christmas two years ago. This year the company plans on hiring 50,000 temporary workers. The company won't give a forecast of how it sees sales this holiday season, saying that it has so many different types of customers that a forecast is difficult. But it is expected to be slower than usual.
