United Parcel Service Inc. attributed lower third-quarter earnings estimates to a sharp drop in shipping activity after last month's terrorist attacks.
UPS, Atlanta, now expects to earn 45 to 48 cents per share, down from an earlier lowered estimate of 52 to 55 cents per share.
UPS said it was on track to reach the earlier estimate but that volume declined more than 10 percent the week of the attacks. Though shipping levels have rebounded, volume has not yet returned to early September levels, particularly in the air operations and internationally.
“UPS maintained operations through its ground network, with our people doing whatever it took to provide service to our customers,” said Scott Davis, UPS' chief financial officer. “We were able to move the majority of air packages via this network, but the grounding of our air fleet significantly affected normal operations.”
Davis said that the financial cost to UPS from the attacks would be about $130 million for the quarter.
UPS does not expect to get much help from the Airline Stabilization Act, which was enacted after the attacks and provides $15 billion in aid to U.S. air carriers to help prevent bankruptcies and minimize other financial hardships. A company spokesman said only $500 million will go to cargo airlines and that UPS will receive “only a fraction” of that amount.
UPS will announce its third-quarter results Oct. 18.
