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UPS (UPS) beat second-quarter profit guidance on Tuesday, amid continued high demand for residential and healthcare deliveries. But forecasts for revenue growth and margin in the United States have been lower than some forecasts. UPS stock has fallen sharply.
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The report comes amid serious supply chain disruptions around the world, due in part to the rebound in the global economy. UPS and FedEx (FDX) have increased surcharges in recent months, but have also struggled to make deliveries on time.
UPS gains
Estimates: Analysts polled by FactSet saw UPS earnings per share climb 32% year-on-year to $ 2.81. They expected sales to increase 13% to $ 23.19 billion.
Results: UPS profits reached $ 3.06 per share with revenue up 14% to $ 23.42 billion.
US domestic sales increased 10.2%, slightly below some expectations.
UPS forecasts an operating margin of 12.7% going forward compared to 14% in Q2.
As the Delta variant of Covid spreads rapidly, people can once again retreat indoors to shop online and deliver to homes.
During this time, UPS has also become a leader in the delivery of vaccines and supplies. On an Investor Day on June 9, the company predicted that its healthcare unit would grow at a compound annual growth rate of 12.3% to reach $ 10 billion in revenue by 2023.
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UPS stock
The shares sold 7.5% to 194.04 on morning stock exchange trading today. UPS stock worked at a buy point of 219.69 from a flat basis, according to MarketSmith chart analysis. An early entry just above the short term high is at 215.03.
Its relative strength line is trending downward, but after hitting a multi-year high in May. The UPS stock has an RS rating of 84 out of a possible 99. His EPS rating is 89.
FedEx stock was down 4% to 285.67 as it considers a fixed base buy point of 320. The RS line for FDX stock has lagged in the past nine months. Last month, FedEx suspended about 1,400 freight forwarding customers as part of a shock measure to reduce network congestion, the Wall Street Journal said.
Also in June, FedEx posted fourth quarter earnings roughly in line with analysts’ opinions, as revenue growth accelerated further.
Amazon.com (AMZN), a key UPS customer but also a growing rival, released its results Thursday evening. AMZN shares lost 0.6% on Tuesday morning.
Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.
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