UPS (UPS) Slapped on Weak Q2, Lower Outlook
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Price: $86.75 -0.64%
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EPS Growth %: +4.0%
Financial Fact:
Purchased transportation: 1.78B
Today's EPS Names:
ANF, DXLG, FL, More
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The second quarter wasn't pretty for UPS (NYSE: UPS) on any level and guidance was ratcheted down as global economic headwinds take their toll. Shares are selling off sharply on the news.
The shipping giant reported revenues in the quarter of $13.35 billion, up from $13.19 billion last year, but well below the Wall Street consensus of $13.7 billion.
US. domestic package revenues rose 4.1 percent to $8.06 billion. International package revenues fell to $3.01 billion, versus $3.14 billion last year. The International business remains under pressure due to weaker global economies and reductions in exports from Asia. Currency fluctuations also had a negative impact. Supply Chain & Freight revenues came in at $2.28 billion, versus $2.32 billion last year.
Diluted EPS was $1.15, versus $1.07 (adjusted last year) and also below the Wall Street consensus of $1.17.
"Increasing uncertainty in the United States, continuing weakness in Asia exports and the debt crisis in Europe are impacting projections of economic expansion," said Scott Davis, UPS chairman and CEO. "Throughout its history, UPS has maintained its strength in all economic cycles and we are making the adjustments necessary to respond to today’s challenging conditions."
Free cash flow totaled $3 billion for the six months ending June 30, up $600 million over the same period last year. Capital expenditures were $949 million. UPS repurchased 11.3 million shares for approximately $870 million and paid dividends totaling $1.1 billion, a 9.6% increase per share over the prior year.
As we look toward the second half of the year, customers are more concerned as greater uncertainty exists. Additionally, economic growth expectations have come down,” Kuehn continued.
Looking ahead, UPS lowered its guidance for 2012 diluted earnings per share to a range of $4.50 to $4.70, down from its prior guidance of $4.70 to $5.00 and the consensus of $4.83.
"As we look toward the second half of the year, customers are more concerned as greater uncertainty exists," said CFO said Kurt Kuehn. "Additionally, economic growth expectations have come down."
On its conference call, the company said it is concerned by the lack of business-to-business growth. However, they see rapid growth in lower-yielding products.
Shares of UPS are down 4 percent to $74.84 in pre-open action Tuesday. The company's results are also weighing on rival FedEx Corporation (NYSE: FDX), which is down 1.8 percent.
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The shipping giant reported revenues in the quarter of $13.35 billion, up from $13.19 billion last year, but well below the Wall Street consensus of $13.7 billion.
US. domestic package revenues rose 4.1 percent to $8.06 billion. International package revenues fell to $3.01 billion, versus $3.14 billion last year. The International business remains under pressure due to weaker global economies and reductions in exports from Asia. Currency fluctuations also had a negative impact. Supply Chain & Freight revenues came in at $2.28 billion, versus $2.32 billion last year.
Diluted EPS was $1.15, versus $1.07 (adjusted last year) and also below the Wall Street consensus of $1.17.
"Increasing uncertainty in the United States, continuing weakness in Asia exports and the debt crisis in Europe are impacting projections of economic expansion," said Scott Davis, UPS chairman and CEO. "Throughout its history, UPS has maintained its strength in all economic cycles and we are making the adjustments necessary to respond to today’s challenging conditions."
Free cash flow totaled $3 billion for the six months ending June 30, up $600 million over the same period last year. Capital expenditures were $949 million. UPS repurchased 11.3 million shares for approximately $870 million and paid dividends totaling $1.1 billion, a 9.6% increase per share over the prior year.
As we look toward the second half of the year, customers are more concerned as greater uncertainty exists. Additionally, economic growth expectations have come down,” Kuehn continued.
Looking ahead, UPS lowered its guidance for 2012 diluted earnings per share to a range of $4.50 to $4.70, down from its prior guidance of $4.70 to $5.00 and the consensus of $4.83.
"As we look toward the second half of the year, customers are more concerned as greater uncertainty exists," said CFO said Kurt Kuehn. "Additionally, economic growth expectations have come down."
On its conference call, the company said it is concerned by the lack of business-to-business growth. However, they see rapid growth in lower-yielding products.
Shares of UPS are down 4 percent to $74.84 in pre-open action Tuesday. The company's results are also weighing on rival FedEx Corporation (NYSE: FDX), which is down 1.8 percent.
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Thomas Felix Clauss on Jul 24, 2012 01:54 PMMark as Spam | Reply to this comment
Are they on a Cash Basis?