After Sandy Springs-based UPS failed to deliver tens of thousands of packages on time for Christmas 2013, the company said it will report a weaker profit than expected as a result.
The shipping giant said it used 30,000 more temporary employees than it expected in order to cope with a surge of last-minute orders amid an “unprecedented level of online shopping.” The problems were exacerbated by the shorter holiday shopping period due to a late Thanksgiving and storms in December. All in all, UPS said it used 85,000 temporary employees instead of the 55,000 originally planned.
The company now anticipates earnings of $4.57 per diluted share for the full year 2013, down from its previous expectations of making $4.65 to $4.85 per share.
“We think UPS did a poor job forecasting the holiday season, but we expect improved readiness this year as online shopping continues to grow,” Standard & Poor’s analyst Jim Corridore wrote in a note to investors.
The late surge of online orders pushed UPS’s “peak week” beyond its normal period of Dec. 16-20. The busiest delivery day turned out to be Dec. 23 — six days later than expected. On Dec. 23, UPS delivered more than 31 million packages — a one-day record, and 13 percent higher than the peak day of 2012.
Still, UPS said it is “confident of its 2014 outlook,” expecting a 10 to 15 percent year-on-year increase in diluted earnings per share. The company reports its full financial results Jan. 30.
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