Saturday, September 27, 2014

UPS Conference Call Review

t's been a difficult year for United Parcel Service (NYSE: UPS  ) investors, as the stock has notably underperformed the S&P 500 and its main rival, FedEx (NYSE: FDX  ) . After a winter beset with difficulties for the logistics companies because of a combination of poor weather, unexpectedly strong e-commerce delivery demand, and a Christmas shopping season with fewer than average days, many investors thought UPS might be over the worst by now. Unfortunately, that wasn't the case, and the second-quarter results proved to be a disappointment. Here's what management wants you to know about its performance.

United Parcel Service delivers.

Investing in long-term growth

After the winter debacle, during which many customers saw delayed delivery and UPS suffered a ramp-up in costs associated with unexpectedly high peak demand, UPS management committed itself to investing in ways to deal with any future problems. Unfortunately, the costs associated with these investments, in areas such as technological and operational expansion, are going to be more than initially expected. According to CFO Kurt Kuehn:


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