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UPS earned $1.2 billion in the fourth-quarter but a last-minute surge in holiday shipments drove up costs and hurt results.

UPS was undone in December by a big increase in online shopping and a crush of last-minute orders by shoppers who jumped on offers of free shipping until the final days before Christmas. An unusually late Thanksgiving added to UPS’ challenge by shrinking the traditional shopping-and-shipping season by several days.

District Attorney Robert Johnson’s office says it’s looking into the claims in Mohanie Sukhu’s lawsuit. She alleges that when she was summoned last summer to UPS loss prevention manager James Jiggets’ office, he forced her to perform oral sex on him and then attempted to remove her pants to have sex with her

United Parcel Service was sued by Kim Muniz, who said the delivery giant had discriminated against her when she was demoted from her position as division manager. A jury found for Muniz and awarded her about $27,000 — about $10k in lost earnings, $7,300 in medical expenses and just under $10k for her “economic loss.”

That’s not the bad part. Muniz sued for attorneys’ fees — and a federal court awarded her almost $700,000. In other words, Muniz was awarded legal fees that were more than 25 times the damages approved by the jury.

The financial results in the U.S. were negatively affected by the combination of a shortened peak shopping season and an unprecedented level of online shopping that included a surge of last-minute orders. In an effort to maintain service standards and commitments, UPS deployed additional equipment and people. For example, the company utilized 85,000 temporary employees, 30,000 more than planned. Also, December weather had an effect and hurt earnings results.

As an analyst, I’ll cut UPS some slack on lowering its guidance for its fourth-quarter EPS. Despite its fourth-quarter challenges and results, the company is confident of its 2014 outlook. UPS expects full-year 2014 diluted earnings per share to grow in line with its long term targets of 10% to 15%, compared to 2013 adjusted results. Further details will be provided when the company releases earnings on Jan. 30.

United Parcel Service’s failure to deliver thousands of packages in time for Christmas did more than disappoint online shoppers. It’s apparently going to disappoint investors as well.

“Despite fourth-quarter performance, the company is confident of its 2014 outlook,” UPS said. It expects profits to rise 10% to 15%