(Reuters) – United Parcel Service Inc said on Tuesday it expects full-year revenue to be at the lower end of its earlier forecast as the freight bellwether grapples with a weakening economy, sending its shares down 5% at $185.50 in premarket trade.
Most delivery firms were left with a bloated delivery capacity after online sales that had peaked during the pandemic started to fizzle as high inflation dented discretionary spending.
“In the first quarter, deceleration in U.S. retail sales resulted in lower volume than we anticipated, and we faced ongoing demand weakness in Asia,” UPS Chief Executive Officer Carol Tomé said.
The company forecast full-year revenue to be about $97.0 billion, compared with the average analyst estimate of $98.14 billion, as per Refinitiv data.
However, the world’s largest parcel delivery firm has benefited in recent quarters from a strong focus on moving high-margin parcels, coupled with measures to control costs.
The company posted an adjusted profit of $2.20 per share for the quarter through March, compared with $3.05 a year earlier.
(Reporting by Priyamvada C in Bengaluru; Editing by Shinjini Ganguli)
