UPS Reports Lower-than-Expected Earnings and Revenue

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UNITED ($NYSE:UPS): UPS is a publicly traded stock on the New York Stock Exchange and has a long history of providing reliable delivery services. The company reported a Non-GAAP EPS of $2.20, which was $0.01 lower than expected, and revenue of $22.9B, which missed the forecast by $80M. The decreased earnings and revenue was attributed to higher costs associated with the peak holiday season. UPS also announced a plan to invest $1 billion in capital expenditures to improve their customer service experience and expand their delivery capacity.

They hope that this investment will help improve their financial results going forward. Overall, UPS reported lower-than-expected earnings and revenue for the fourth quarter, but they remain confident that their investment plan and commitment to customer service will help them rebound in the coming quarters.

Share Price

The stock opened at $182.7 and closed at $176.3, a drop of 10.0% from the previous closing price of 195.8. UPS had taken measures to reduce costs in the face of the pandemic, such as reducing its workforce and suspending share buybacks. Despite these measures, the company was unable to achieve its projected results due to reduced demand and lower shipping volumes. Live Quote…

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for UPS. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for UPS. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for UPS. More…

Key Ratios Snapshot

Some of the financial key ratios for UPS are shown below. More…

Analysis

At GoodWhale, we recently conducted an analysis of UNITED PARCEL SERVICE’s financials and have come to the conclusion that this is a medium-risk investment. We considered both their financial and business aspects to come to this conclusion. In particular, we detected one risk warning in their income sheet; if you want to know more about this warning, please register with us and we will be happy to provide you with more information. Overall, we believe that UNITED PARCEL SERVICE is a good investment, but caution is still advised due to the risk associated with this type of venture. We recommend doing some further research to ensure that you are comfortable with the amount of risk involved. More…

Peers

There is intense competition between United Parcel Service Inc and its competitors: Deutsche Post AG, Expeditors International of Washington Inc, Kuehne + Nagel International AG. All these companies are striving to get a larger share of the global market for logistics and transportation services.

– Deutsche Post AG ($OTCPK:DPSTF)

Deutsche Post AG, together with its subsidiaries, provides postal and logistics services in Germany and internationally. The company operates through three segments: Post, Express, and Parcel (PEPS); eCommerce Parcel; and Supply Chain. The Post segment offers various postal services, including the delivery of letters and parcels, as well as direct marketing products. The Express segment provides international express mail, national express mail, and express courier services. The Parcel (PEPS) segment offers parcel services. The eCommerce Parcel segment engages in the provision of parcel services for business customers and private individuals. The Supply Chain segment offers a range of logistics solutions, including air and ocean freight, warehousing, and contract logistics. Deutsche Post AG was founded in 1995 and is headquartered in Bonn, Germany.

– Expeditors International of Washington Inc ($NASDAQ:EXPD)

Expeditors International of Washington Inc is a Fortune 500 company that provides global logistics services. It is headquartered in Seattle, Washington and has over 300 offices in 70 countries. The company is a leading provider of transportation and logistics services, and its core business is facilitating the movement of goods and people around the world. Expeditors has a diversified business model that includes airfreight, ocean freight, customs brokerage, and warehousing and distribution. The company’s global logistics network includes a comprehensive range of transportation and distribution services that allow it to provide end-to-end solutions for its customers. Expeditors is a publicly traded company listed on the NASDAQ stock exchange under the ticker symbol EXPD.

– Kuehne + Nagel International AG ($OTCPK:KHNGF)

Kuehne + Nagel International AG, together with its subsidiaries, provides logistics and transportation services worldwide. The company operates through four segments: Sea Logistics, Air Logistics, Land Logistics, and Overland Logistics. It offers transport and storage solutions for various goods, including chemicals and oil, fashion, food, and beverages, general cargo, healthcare, high-tech products, automotive parts, and others. The company was founded in 1890 and is headquartered in Schindellegi, Switzerland.

Summary

Investing in UNITED PARCEL SERVICE (UPS) can be a viable option, as the company reported their Non-GAAP Earnings Per Share (EPS) of $2.20, which was $0.01 short of estimates and revenue of $22.9B which was $80M short of estimates. The stock price reacted negatively to the news, dropping on the same day, indicating investor sentiment has shifted due to the earnings report. Analysts suggest that investors should pay attention to future announcements from UPS to determine if the current stock price is an opportunity for a long term investment.