What FedEx's Earnings Results Mean for UPS Shareholders
It's almost impossible to look at a set of quarterly results from FedEx (NYSE: FDX) without considering what the read-across will be for United Parcel Service (NYSE: UPS). Given that the fiscal 2020 fourth-quarter results FedEx delivered on June 30 were warmly received by the market, it would seem appropriate to take a look at what UPS investors should be expecting when their company next reports on July 22. Here's the lowdown.
FedEx's earnings excited the market because the margin on the company's ground delivery business was a lot better than many had feared it would be. It's no secret that both that UPS and FedEx have had to adapt to a unique set of operating conditions due to the COVID-19 pandemic, all of which have placed pressure on their profit margins.
In a nutshell, the lockdowns and production shutdowns caused higher-margin business-to-business (B2B) deliveries to collapse, while simultaneously prompting a surge in less-profitable business-to-consumer (B2C) e-commerce deliveries. In addition, both companies have been hit by a host of extra expenses due to the coronavirus pandemic, while their revenues for freight and international deliveries have slumped.
Source Fool.com
