BrownCafe
United Parcel Service (NYSE:UPS) may seem too big and brown to fail, but that’s simply not true. Even big companies can have big risks. With $35 billion in assets, 435,000 employees, and operations in 220 countries and territories, UPS has a lot to manage.
In every annual 10-K SEC filing, corporations have to list their biggest risks. Here are five of the biggest risks UPS thinks it (and its shareholders) has to handle.
BB&T Capital Markets Analyst Kevin Sterling says United Parcel Service, Inc. (UPS) is leading the pack in terms of technology investments. He says the company is looking to tackle the opportunities and challenges of e-commerce with things like its ORION software.
“ORION is a mapping software which essentially helps drivers reduce empty miles, maximizing their effectiveness and utilization throughout the day,” he says. “A reduction of one mile per driver per day at UPS can save the company $50 million a year.”
United Parcel Service is more than its bottom line.
Profitability is important. It’s the literal bottom line every investor needs to know — but it isn’t everything. Companies turn sales into profit in different ways. UPS stock has been hot and cold for investors over the past few years, and it’s often tricky to pick which metrics matter most. For investors interested in understanding UPS’s real bottom line, there’s more to this megacorporation than many might imagine. Here are three numbers to put United Parcel Service‘s (NYSE: UPS) profit in perspective.
Domestic demand looks iffy, but European shipment growth bodes well for FedEx’s proposed acquisition of TNT Express.
Profit growth came from international markets
Indeed, operating profit rose just 3% in the U.S. domestic package segment last quarter. The upside in UPS’s results instead came from outside the U.S.
The bottom line is that despite economic weakness in a number of countries, global trade is growing. Intra-Europe shipments rose 8.5% for UPS last quarter. The strong dollar and weak euro have hurt U.S. exports but are boosting import demand in the U.S. European luxury goods companies have also seen good growth in Asia, helped by the weak euro.
United Parcel Service Inc. has fired warning shots across the bow of the Federal Reserve and the stock market, by saying that U.S. economic growth appears to be slowing.
The package-delivery giant’s cautious outlook runs counter to what Fed Chairwoman Janet Yellen said earlier this month, when she told Congress she expects the U.S. economy to keep strengthening enough for the central bank to raise interest rates “at some point this year.” The Fed’s outlook could become clearer when it releases its latest monetary policy statement on Wednesday.
It also suggests investors should take the relative weakness in UPS stock, as well as the Dow Jones Transportation Average, more seriously, as a warning that a much bigger selloff may be on the horizon for the broader market.