UPS Cuts Outlook on Lower Volume and Fuel Costs

CNBC has a story about UPS cutting their outlook : UPS Cuts Outlook on Lower Volume and Fuel Costs

United Parcel Service, the world’s largest shipping carrier, cut its first-quarter profit guidance Tuesday, citing lower volume and higher fuel costs.

The company said it now expects earnings per share of 86 cents or 87 cents. Previously, the company said it expected first quarter profit between 94 cents and 98 cents per share.Analysts polled by Thomson Financial were expecting earnings of 93 cents per share. UPS shares fell about 4 percent in electronic after-hours trading.

The company said lower volume trends from February continued through March, making it impossible to meet its prior guidance.

Atlanta-based UPS said a shift away from premium products and higher fuel costs also contributed to the guidance cut.

Weaker dollar has lead to higher inflation affecting oil prices. The Federal Reserve faces a dilemma now as to low interest rates to save banks from imploding and stimulating the economy or to focus on weaker dollar and control inflation. Right now lower interest rates is winning the battle, hurting profit margins of companies like UPS and Fedex.