United Parcel Service Inc (UPS.N) shares fell to a three-month low on Tuesday on worries that growth from the pandemic-fueled e-commerce boom may be fading.
The company logo for United Parcel Service , is displayed on a screen at the New York Stock Exchange in New York, U.S., October 22, 2019. REUTERS/Brendan McDermid/File Photo/File Photoshares fell to a three-month low on Tuesday on worries that growth from the pandemic-fueled e-commerce boom may be fading.
The company said second-quarter domestic volume fell 2.9%, with ground - composed largely of e-commerce deliveries - dropping 4% versus the year earlier. "Investors are likely reading this as an indication the pandemic-driven demand trend is slowing," Cowen Research analyst Helane Becker said in a client note.UPS has been a key beneficiary of the pandemic shift to online shopping. Like rival FedEx CorpThe share price decline came despite second-quarter profit and revenue that topped Wall Street estimates.
Excluding items, UPS earned $3.06 per share, above analysts' average estimate of $2.82, according to Refinitiv data.Executives said domestic package volume could be under pressure in the second half of the year as some shoppers return to in-store shopping and customers scramble toSince Carol Tomé became CEO in June 2020, UPS has been reining in costs and focusing on high-margin packages under her "better not bigger" strategy.
Inflation and the more contagious Delta variant of the coronavirus are creating uncertainty as UPS prepares for the upcoming holiday shipping peak - when delivery demand is expected to exceed supply by 5 million packages per day.Reporting by Sanjana Shivdas in Bengaluru and Lisa Baertlein in Los Angeles Editing by David Holmes and Matthew LewisSubscribe for our daily curated newsletter to receive the latest exclusive Reuters coverage delivered to your inbox.