UPS shares hit three-month low on worries e-commerce is cooling - Reuters

suitersa.blogspot.com

July 27 (Reuters) - United Parcel Service Inc (UPS.N) shares fell to a three-month low on Tuesday on worries that growth from the pandemic-fueled e-commerce boom may be fading.

The company said second-quarter domestic volume fell 2.9%, with ground - composed largely of e-commerce deliveries - dropping 4% versus the year earlier.

"Investors are likely reading this as an indication the pandemic-driven demand trend is slowing," Cowen Research analyst Helane Becker said in a client note.

The stock was down 9.3% at $190.32 in midday trading, its lowest price since late April.

UPS has been a key beneficiary of the pandemic shift to online shopping. Like rival FedEx Corp (FDX.N) it responded to the boom in home delivery demand by adding profit-boosting surcharges.

The share price decline came despite second-quarter profit and revenue that topped Wall Street estimates.

The company logo for United Parcel Service (UPS), is displayed on a screen at the New York Stock Exchange (NYSE) in New York, U.S., October 22, 2019. REUTERS/Brendan McDermid/File Photo/File Photo

Excluding items, UPS earned $3.06 per share, above analysts' average estimate of $2.82, according to Refinitiv data.

Total revenue jumped 14.5% to $23.42 billion, beating a forecast $23.24 billion.

Executives said domestic package volume could be under pressure in the second half of the year as some shoppers return to in-store shopping and customers scramble to replenish inventory at a time when goods are getting stuck in clogged seaports and rail yards.

Since Carol Tomé became CEO in June 2020, UPS has been reining in costs and focusing on high-margin packages under her "better not bigger" strategy. During the second quarter, UPS reported growth in lucrative air and healthcare shipments.

Inflation and the more contagious Delta variant of the coronavirus are creating uncertainty as UPS prepares for the upcoming holiday shipping peak - when delivery demand is expected to exceed supply by 5 million packages per day.

UPS is reserving planes and other equipment needed for the expected surge, Tomé said.

Reporting by Sanjana Shivdas in Bengaluru and Lisa Baertlein in Los Angeles Editing by David Holmes and Matthew Lewis

Our Standards: The Thomson Reuters Trust Principles.

Adblock test (Why?)

"share" - Google News
July 27, 2021 at 11:38PM
https://ift.tt/3BNmR95

UPS shares hit three-month low on worries e-commerce is cooling - Reuters
"share" - Google News
https://ift.tt/2VXQsKd
https://ift.tt/3d2Wjnc

Bagikan Berita Ini