It's been a difficult year for United Parcel Service (NYSE: UPS ) investors, as they have watched their stock underperform key rival FedEx (NYSE: FDX ) and the S&P 500. However, the third-quarter results
saw a return to form, and investors have cause to believe that the
stock can go do well going forward. Here is a look at what management
wants you to know about the business, and why UPS could be a stock to
buy.
Second, the relatively stronger growth in its e-commerce business-to-consumer, or B2C, packages is pressuring margins downward. B2C packages tend to be lighter and lower-yielding deliveries. In addition, UPS and FedEx are having to deal with burgeoning e-commerce delivery growth by expanding capacity -- something else to pressure margins.
The following five points from UPS' earnings call address these two issues.
READ THE FULL EQUITY RESEARCH ARTICLE LINKED
What you need to know about UPS in 2014
Essentially, UPS has had a difficult year for two main reasons. First, a combination of bad weather and unexpected spikes in demand during last year's holiday season hurt its profitability in its first quarter. Moreover, UPS had to reduce its 2014 earnings forecast in July due to increasing its investment plans in order to ensure it will meet peak demand spikes in future.Second, the relatively stronger growth in its e-commerce business-to-consumer, or B2C, packages is pressuring margins downward. B2C packages tend to be lighter and lower-yielding deliveries. In addition, UPS and FedEx are having to deal with burgeoning e-commerce delivery growth by expanding capacity -- something else to pressure margins.
The following five points from UPS' earnings call address these two issues.
READ THE FULL EQUITY RESEARCH ARTICLE LINKED
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