UPS (NYSE: UPS) today announced that second quarter diluted earnings per share are expected to be $1.13. Overcapacity in the global air freight market, increasing customer preference for lower-yielding shipping solutions, and a slowing U.S. industrial economy drove revenue and operating profit below expectations. In addition, UPS experienced some slowing in package volume growth as a result of labor negotiations.

*** The Street currently sees Q2 EPS of $1.20.

We expect the second quarter market trends to persist and UPS is adapting to meet these conditions, said Kurt Kuehn, UPS Chief Financial Officer. Despite downward revisions to economic forecasts for the second half of the year, we anticipate solid profit growth. However, we are reducing guidance for 2013 adjusted diluted EPS to a range of $4.65 to $4.85, a 3 - 7% increase over last year.

*** The Street is at FY13 EPS of $4.98.