Shares of United Parcel Service Inc. tumbled $8.71, or 6.8%, in morning trade Thursday, enough to be the main drag on the Dow transports into negative territory, after the package delivery giant provided a downbeat earnings outlook. The price decline was shaving about 53 points from the Dow Jones Transportation Average , which was down 59 points. The company reported before the bell fourth-quarter results that beat expectations. But on the post-earnings call with analysts, Chief Financial Officer Richard Peretz said first-quarter earnings per share were expected to grow 15% to 18% from a year ago, according to a transcript provided by FactSet, while the current FactSet EPS consensus of $1.59 implies growth of 20.5%. Separately, President of U.S. Operations Myron Gray said that while holiday sales growth was strong, variability of digital demand created “challenges” during the peak period, with volume accelerating more than expected. “The early surge pushed our U.S. network above its maximum capacity,” Myron said, according to the FactSet transcript. “The added cost increased operating expense by about $125 million.” UPS’s was still up 1% over the past three months, while the Dow transports have gained 11.5% and the Dow Jones Industrial Average has climbed 11.4%.
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