UPS shares slump on lackluster outlook

Shares of United Parcel Service (NYSE: UPS) fell after the world's largest shipper reduced its first quarter earnings forecast, citing a downturn in the U.S. economy and lower shipping volumes.

The warning, which came two months after the company told investors that it might miss its earnings guidance, isn't a huge shock and likely will be one of many to come during the current earnings season. After the close yesterday, UPS lowered its first quarter outlook to 86 cents to 87 cents from 94 cents to 98 cents, according to The Associated Press. Analysts were expecting earnings of 93 cents.

Pundits such as BB&T analyst John Barnes aren't finding fault with UPS.

"I don't think they misread anything. The market just got a lot weaker and oil prices shot up more aggressively than they thought,'' he told Bloomberg TV, adding that package shippers are "going to have to provide guidance with the assumption that oil prices are going to stay this high for the foreseeable future.''

Given that UPS is down about 3%, you have to wonder whether investors will be so forgiving to other companies.