UPS (NYSE: UPS), a US-based international parcel company, saw its shares fall on Tuesday despite posting some healthy financial gains during its third quarter trading.
The company booked consolidated revenue of $21.2 billion for the third quarter, up 15.9% year-on-year. Similarly, the company’s consolidated average daily volume increased by 13.5% per year, but net profit increased by 10.7% on an adjusted basis to $2 billion.
The company also recorded third quarter operating profit of $2.4 billion, an 11.0% increase from last year and a 9.9% adjustment. Fundamentals look similarly pink to UPS shareholders, with adjusted revenue per diluted profit bouncing 10.1% year-on-year.
“Our performance highlights the agility of our global integrated network amid the ongoing challenges of the pandemic. Carol Tomé, CEO of UPS, said:
“Upzer is the everyday hero who keeps the global supply chain running. We appreciate your continued commitment to our customers and the communities we serve.”
In its US business, the company expected profits to fall more than $100 billion in the third quarter, despite an average daily volume increase of 13.8%.
In the international segment, volume rose 12.1%, and profits rose over $300 million.
Due to the supply and freight business, revenues increased by 16.5%, while profits increased by approximately $50 million.
“Our better, less-large approach has positively impacted quarterly performance, particularly through the revenue-quality actions we took. Furthermore, we recently launched a new initiative to further reduce costs,” said Brian Newman, UPS Chief Financial Officer.
“Looking forward to the fourth quarter, we are working with our customers to control volume and ensure network resilience using proven tools. We are focused on delivering successful peaks and generating cash revenue.”
Following what appeared to be a positive update, UPS shares fell between 4% and 5%, at over $163 per share. This price drop is likely to predict some bouncebacks against the rapid rise in delivery during the lockdown and prices that could increase face-to-face retail activity as vaccines begin to be managed in the new year.
Currently, UPS prices are around 10% ahead of the analyst’s target of $146.75 per share. Analysts currently have a consensus “purchase” rating on equities. The AP/E ratio is 32.05. The MarketBeat community also has a “low-performance” stance of 51.90% on its stock.
