Brown Trucks Bounce Back: UPS Profits Boost and `Newbies' Driving Growth

Let's talk about UPS, the shipping giant that just wowed Wall Street with its latest earnings report. The company's profit soared in the latest quarter, beating what analysts expected. This happened after UPS said goodbye to its truckload brokerage business, Coyote Logistics. Shares of the company jumped up on this positive news. For a while, things were tough for UPS. Since late 2021, the company faced weak demand for nine quarters straight. But guess what? They're now seeing growth in the U. S. , especially in the second half of the year. What's driving this growth? Well, new e-commerce players are on the scene. Shein and Temu, both linked to China, are bringing bargain prices to shoppers. This is changing the game, with more packages going by ground service, and some even going through the U. S. Postal Service for final delivery.

UPS thought their operating margin this year would be around 9. 4%. But things are looking up, and they now predict it'll be 9. 6%. In the third quarter, their average daily volumes in the U. S. grew by 6. 5%, and their operating margin reached 8. 9%, higher than last year's 7. 7%. The company made $1. 76 per share in adjusted profit, which is more than last year's $1. 57 and what analysts expected ($1. 63). Plus, their total revenue of $22. 25 billion was even higher than estimated. It's not all packages and profits, though. UPS is now handling the U. S. Postal Service's air cargo business. They took over this job from FedEx after their contract ended. UPS is confident this new five-year contract with USPS will be profitable from the get-go.

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