UPS LOWERS 3RD-QUARTER EARNINGS EXPECTATIONS

UPS LOWERS 3RD-QUARTER EARNINGS EXPECTATIONS United Parcel Service said Friday it has reduced its earnings expectations for the third quarter after assessing the impact of the Sept. 11 terrorist attacks.
   The Atlanta-based express giant now expects earnings to be 45 to 48 cents per share, reduced from previous estimates of 52 to 55 cents per share.
   “During the week of the attacks, volume declined more than 10 percent as shippers across the country reduced their activity,” the company said. “Although it has rebounded, volume is not yet back to early-September levels, particularly in the air operations and internationally.”
   UPS was forced to divert all its volume to ground transport after the Federal Aviation Administration closed all U.S. airports on Sept. 11. Limits on international flights and belly cargo aboard passenger aircraft impacted the company's ability to clear its express logjams, even after the airports were open to commercial aircraft.
      “The financial impact of this event on UPS in the third quarter was approximately $130 million,” said Scott Davis, UPS's chief financial officer. “this represents the additional costs we incurred to maintain service and lost revenue as a result of lower package volume since the attacks. The new guidance for earnings per share does not include the impact of funds available from the Federal government through the Airline Stabilization Act”
   UPS will announce its third-quarter results Oct. 18.