UPS forecasts uncertain 4Q

After recovering somewhat from a freight fall-off generated by tense contract negotiations with its unionized labor force earlier this year, UPS is worried that consumer spending won't be strong enough to boost freight demand in the fourth quarter. CFO Scott Davis said UPS had succeeded in winning back just over half of the U.S. domestic volume diverted in June and July when contract talks were underway.

After recovering somewhat from a freight fall-off generated by tense contract negotiations with its unionized labor force earlier this year, UPS is worried that consumer spending won't be strong enough to boost freight demand in the fourth quarter.

CFO Scott Davis said UPS had succeeded in winning back just over half of the U.S. domestic volume diverted in June and July when contract talks were underway.

"We are very encouraged by the amount of new business bid activity currently in the pipeline, now that we are no longer fighting the headwinds of labor uncertainty," he said. "The economy, however, is the bigger issue since it is not showing signs of recovery. Consumer confidence will be key to the success in the fourth quarter."

For the third quarter, Atlanta-based UPS said net income rose to $578 million on revenues of $7.75 billion, up from net income of $568 million on revenues of $7.4 billion.

Davis said the company expects earnings in a range from 55 to 60 cents per share for the fourth quarter, though he cautioned that consumer spending, the economy and success in regaining package volume all could affect those results.

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