UPS (UPS), FedEx (FDX) Now Getting Fallout from Holiday Shopping: the Returns!
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The sale of products through the Internet isn't just a good thing for the retailers like Amazon.com (Nasdaq: AMZN), Wal-mart (NYSE: WMT), Best Buy (NYSE: BBY), and eBay (Nasdaq: EBAY)... these sales also play a vital role for shippers United Parcel (NYSE: UPS) and FedEx (NYSE: FDX).
While retailers get a one-time benefit from moving a product, this benefit goes down when an item is returned -- one of the big underlying caveats for Internet sales. For UPS, FedEx, and the USPS, that's a boon. They get paid to and fro. FedEx alone said it expects 550,000 returns on Tuesday (yesterday), up 7.7 percent from the same period last year.
Amid the increased shipments, one component both UPS and FedEx are looking to cut is deliveries to the home. Those are the most expensive, and that's why both are looking to partner with the USPS for the last leg of many packages trips.
Investors will be focused on how progress is coming along with the USPS, as well as overall margin improvements on lower fuel costs in the quarter. UPS will report quarterly results on January 31st, while FedEx will not report til mid-March.
For its fourth-quarter, UPS is expected to report earnings of $1.26 per share on revenue of $14.42 billion.
Shares of both FedEx and UPS are lower Wednesday.
While retailers get a one-time benefit from moving a product, this benefit goes down when an item is returned -- one of the big underlying caveats for Internet sales. For UPS, FedEx, and the USPS, that's a boon. They get paid to and fro. FedEx alone said it expects 550,000 returns on Tuesday (yesterday), up 7.7 percent from the same period last year.
Amid the increased shipments, one component both UPS and FedEx are looking to cut is deliveries to the home. Those are the most expensive, and that's why both are looking to partner with the USPS for the last leg of many packages trips.
Investors will be focused on how progress is coming along with the USPS, as well as overall margin improvements on lower fuel costs in the quarter. UPS will report quarterly results on January 31st, while FedEx will not report til mid-March.
For its fourth-quarter, UPS is expected to report earnings of $1.26 per share on revenue of $14.42 billion.
Shares of both FedEx and UPS are lower Wednesday.
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