UPS expects the global economy to get worse before it gets better.
The world’s largest package delivery company is more pessimistic about U.S. growth than many economists. It predicts global trade will grow even slower than the world’s economies – a trend not seen since the recession. It’s making cuts in its business and reducing its earnings projections. UPS on Tuesday lowered its forecast for all of 2012 and said its third-quarter earnings will fall below last year’s results.
Customers are worried about the global economy weakening in the second half of the year, the company said. Their skittishness was also felt in the second quarter, where UPS missed analysts’ expectations for both earnings and revenue. The stock fell more than 4 percent in midday trading. “Economies around the world are showing signs of weakening and our customers are increasingly nervous,” Chairman and CEO Scott Davis said in a conference call with analysts.