ATLANTA, Ga. – Shares of United Parcel Service Inc. slumped Thursday after the package-delivery company gave a cautious outlook for 2020 as it invests more in its network to speed up deliveries.
UPS reported a fourth-quarter loss of $106 million, but after stripping out a charge related to pensions, the adjusted profit matched Wall Street expectations.
However, the Atlanta-based company predicted first-quarter profit would be about the same as a year ago, and it estimated full-year 2020 earnings of $7.76 to $8.06 per share. The middle of that range fell well short of Wall Street expectations for $8.03 per share.
UPS blamed the soft outlook on an expected decline in U.S. industry and global economic weakness.
The company's stock fell 6.7% to close at $108.
Citi analyst Christian Wetherbee said the fourth-quarter results were good for a peak season, but there were negatives in the report.
“We understand the pressure on the stock,” Wetherbee said in a note to clients. He said another year of earnings per share growth in the low- to mid-single digits “seems to be e-commerce's new reality and is not all that exciting.”
Company executives outlined their strategy for growth during a call with analysts. UPS is continuing to invest in automation at sorting facilities, it is expanding weekend deliveries to seven days a week to make online shoppers happy, and it will boost spending designed to attract small-business customers by shortening delivery times.