UPS' latest financial statements reveal why the 111-year-old logistics giant is becoming a stock market darling again

REUTERS/John Sommers II

United Parcel Service (UPS) is an American multinational package delivery and supply chain management company.

Together with the central package delivery operation, the UPS brand (similar to the competitor’s FedEx) is used to denote many of its divisions and subsidiaries, including its cargo airline (UPS Airlines), the transport operation Freight based freight (UPS Freight, formerly Overnite Transportation), and retail packing and shipping centers (The UPS Store). The global logistics company is based in the US city of Sandy Springs, Georgia, which is part of the Greater Atlanta metropolitan area.

Now, it is important to say that UPS’s latest financial statements reveal why the 111-year-old logistics giant is becoming a stock market favorite again.

In this way, it has been said that, without a doubt, UPS is regaining respect among investors after its impressive earnings report.

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It should be noted that UPS ended a fall of 11 quarters in operating margins and recorded record gains.

Likewise, it is appropriate to bring up that UPS announced a series of new services this week before its earnings: delivery in seven days, greater automation, a new delivery pick-up/drop-off partnership with CVS and Michael’s.

It is no secret to anyone that, throughout this year and last year, investors had spoiled at UPS. And the margins in UPS were weakening. More and more banks highlighted Amazon’s threat, which has quickly hosted its delivery services. And the teammates of the giant of the packages in logistics were also seeing the fall of their actions.

However, a change occurred that was unexpected for some. And now, UPS shares reached a maximum of three months after earnings, trading at $ 114.39 per share. It fell to less than $ 90 per share in December 2018, one of the lowest in five years, and rose again before falling to around $ 92 at the end of May.

That being the case, the biggest gain in UPS profits comes from its momentum in air transport the next day. As consumers demand faster deliveries, UPS has significantly increased its carrying capacity.

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Source: Rachel Premack | Business Insider