Deteriorating U.S. economic conditions restrained domestic volume, said UPS in a statement accompanying lowered expectations for first quarter earnings.

UPS set a lower goal of 86 to 87 cents per diluted share, compared with a previously anticipated range of 94 to 98 cents. The world's largest package delivery company acknowledged lower volume trends persisting from February through March, especially in domestic package volume and a shift away from premium products.

Significantly increased fuel costs also contributed to the lower-than-expected results, said UPS.

A full quarterly report is scheduled for April 23.