United Parcel Service (UPS) driver pushes a dolly of packages towards a delivery van on a street in New York.

United Parcel Service on Thursday said earnings suffered from higher costs resulting from surging shipping volumes during the peak holiday period.

The company's shares dropped in premarket trading and remained in the red through Thursday's session, falling nearly 7 percent.

Here's how the company did compared with what Wall Street expected:

EPS: $1.67 vs. $1.66 expected, according to Thomson Reuters

Revenue: $18.83 billion vs. $18.19 billion expected according to Thomson Reuters

The world's largest package delivery company had faced system bottlenecks and delayed deliveries in the period leading up to Christmas.

Despite making huge investments to upgrade its network to handle peak-period volumes, UPS said in December that some deliveries were delayed after a surge in holiday online shopping orders overwhelmed its system.

In peak "cyber-periods," the company said shipments outpaced its network capacity, leading to $125 million in additional operating costs.

Still, UPS announced a record 762 million deliveries during the peak season. Packages delivered for the full quarter increased 5.7 percent over the year-ago period, to 1.5 billion deliveries.

CEO David Abney said the recently passed tax overhaul law will set UPS up for success in 2018 and beyond.

"We expect to unlock significant resources, which will be available for accelerated investments in our network and create additional opportunities for our people," Abney said.

Later on Thursday, UPS credited the Tax Cuts and Jobs Act when announcing its purchase of 18 aircraft: 14 747 planes and four Boeing 767 freighters.

The company adjusted its guidance for 2018, announcing expected earnings between $7.03 and $7.37 per share for the full year.

The disclosure, which follows a 2017 holiday season that smashed online shopping records, will shed light on how the shipping giant is faring amid the widespread economic shift away from brick-and-mortar retail and toward online delivery.

The Atlanta-based company has already sent signals that the season has been a success: UPS said it expected to return 1.4 million packages in December, according to Reuters, breaking its record for the fifth consecutive year.

UPS shares have appreciated more than 20 percent year over year.

Rival FedEx last week said it will be giving out wage increases and bonuses, and will make a voluntary $1.5 billion contribution to the company's pension plan, citing the recent tax law.

—Reuters contributed to this report.