Online surge and bad weather hit UPS results

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UPS delivered a record 31 million packages on 23rd December, but it has warned that profits will be depressed by the costs of dealing with the combination of unprecedented demand for online shopping and bad weather in the run-up to Christmas.

The issues affected operations in the US, and the company has warned that, as a result, full-year 2013 adjusted diluted earnings per share are expected to be $4.57, below the previously provided guidance of $4.65 to $4.85.

“In an effort to maintain service standards and commitments, UPS took extraordinary measures deploying additional equipment and people,” it said. “For example, the company use 85,000 temporary employees, 30,000 more than planned. Also, weather events in December weighed on results.”

And it said that on 23rd December, UPS delivered more than 31 million packages, the most ever and 13 per cent over the prior-year peak day.

“This year’s highest delivery day occurred six days later than expected and was 7.5 per cent greater than planned.”

UPS is due to release its fourth quarter results on 30th January. Despite fourth quarter performance, the company said it was confident that  full-year 2014 diluted earnings per share would grow in line with its long term targets of 10-to-15 per cent, compared to 2013 adjusted results.

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