United Parcel Service, Inc. is a global leader in package delivery, which benefited from a surge in online holiday sales. The company enjoyed a solid holiday season and needed 95,000 seasonal employees to get the job done. The company beat on earnings for the fourth quarter, but the stock slumped on unexpected special situations.
The company was forced to spend $125 million to catch up on delivery backlogs. UPS also announced larger-than-expected plans to add to its fleet of Boeing 737 and 787 airliners. In addition, the company plans to spend $7 billion to build and repair its infrastructure.
The stock closed Wednesday at $127.32, up 6.9% year to date and in bull market territory at 24.7% above its 52-week low of $102.12 set on May 18, 2017. The stock set its all-time intraday high of $135.53 on Jan. 18, 2018, and is currently trading 6.1% below this high. The stock opened Thursday at $119.03, down 6.5%. (See also: Shipping Snags Curb UPS Profit Growth in Fourth Quarter.)
UPS delivered positive earnings, but the stock slumped – shares are not cheap, with an elevated P/E ratio of 31.40. …read more
Read more here: UPS Earnings Delivered, Stock Slumps on Spending