United Parcel Service shares down despite beating expectations for Q3

United Parcel Service shares down despite beating expectations for Q3

United Parcel Service Inc. (UPS) announced its financial result for the third quarter that left behind the consensus forecast amid strong performance across its segments.

The package delivery services company reported earnings of $1.96 billion, or $2.24 per share for the quarter, as compared to $1.75 billion, or $2.01 per share in the same period last year. On an adjusted basis, UPS reported a profit of $2.28 per share, up from $2.07 per share, and easily beating analysts’ average estimate of $1.90 per share.

Revenue for the quarter came in at $21.24 billion, up 15.9 percent from the comparable period last year, and just ahead of $20.21 billion forecasted by analysts.

UPS shares plummeted nearly 5 percent in the mid-day trading Wednesday despite reporting better-than-expected results for the quarter.

If we analyze the segment-wise revenue, the company’s international package sales jumped 17 percent to $4.09 billion, easily beating consensus estimate of $3.70 billion, while domestic package sales rose 15.5 percent to $13.23 billion, versus analysts average estimate of $13.05 billion. Sales from its supply chain and freight jumped 16.5 percent to $3.93 billion, as compared to $3.59 billion forecasted by analysts.

Speaking on the results, Chief Executive Carol Tome said growth from small and medium enterprises, along with strong demand from Asia contributed to the company’s quarterly results.

Just ahead of quarterly results, UBS analyst Thomas Wadewitz raised its ratings on the stock to “Buy,” and lifted the price target from $162 per share to $214 per share.

UPS shares are currently trading around $162.77 on volume of 5.6 million. The 52-week range of the stock is $82.00-$178.01. Overall, the stock performed well in the recent months. The stock climbed about 40 percent during the last 12 months and around 58 percent over the last 6 months.


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