United Parcel Service Inc. (NYSE: UPS) announced Friday reduced fourth quarter preliminary earnings. In addition, it also cut the guidance for 2013 full year results. Before, it had estimated that it would earn between $4.65 a share and $4.85 a share in 2013. However, it has now revised this estimate downward and expects a profit of $4.57 a share for 2013.

The world’s number 1 package delivery company argued that the fewer shopping days during the holiday season prompted a surge in last-minute orders, forcing the company to take extraordinary measures, including hiring 30,000 more temporary workers and deploying additional equipment. These unforeseen costs coupled with inevitable delays hurt 4Q profit. “U.S. results were negatively impacted by the challenges of the compressed peak season coupled with an unprecedented level of online shopping that included a surge of last-minute orders,” the company said in statements.

As expected the reduced guidance sent ripples down the stock market. Although its shares are as of this writing trading intimately close to $100 a share, they had earlier dipped to lows of around $97 a share on news that earnings would be lower than expected.

UPS will report actual results on Jan 30. Till then, investors are likely to have one foot in and the other out. This presents a unique opportunity to establish a position in the stock.

Long-Term Future Bright

UPS’s business performance largely depends on the wider economy. As such, continued improvements in key areas of the economy will translate into improved business for UPS going forward. In the holiday season, for instance, the company delivered more than 31 million packages on December 23, its greatest record yet. This unprecedented surge in deliveries underscores the economic gains recorded in December. The Consumer Price Index rose 0.3 percent in December, the largest gain in six months, according to figures from the Labor Department in Washington.

Based on the brightened consumer sentiment, and the fact that the Fed is actually pulling down its pillars of support, we can comfortably say that the US economic recovery has taken form. This presents the perfect backdrop for continued prosperity for UPS.

In addition, UPS has previously hinted that it is exploring drones to capitalize the prevalent same-day delivery fad. “We certainly have had, in our technology steering committee, presentations from drone vendors,” said UPS Chief Sales and Marketing Officer Alan Gershenhorn in a recent interview published on Business Week. “The commercial use of drones is certainly an interesting technology and we’ll evaluate it ongoing,” he added. Achieving same-day sales will greatly increase turnaround, allowing the company to make more deliveries and to charge premiums.

In the past five years, UPS has gained close to 80 percent on the stock market. The current 1 year target estimate is $109.21. This presents a close to 10 percent upside (at current price). This is a comfortable margin for a stock with strong fundamentals and a proven track record. UPS is a stock that long-term investors should consider adding to their portfolios.

Disclosure: Author represents that he has no position in any stocks mentioned in this article at the time this article was submitted.