Davis took over as the company’s CEO and chairman in January 2008 and has presided over a share price rise of 45%, just trailing competitor FedEx Corp.’s (NYSE: FDX) 51% gain over the same period. Both companies got off to a slow start this year as harsh weather conditions and higher fuel costs cut into results.
When UPS reported fourth-quarter results last January, the company blamed too much demand for its revenue shortfall. The shift to more online sales — and, therefore, more direct shipments to customers — seemed to catch both UPS and FedEx by surprise. UPS and FedEx failed to deliver holiday packages within their projected time windows and many packages did not make it through the system until after Christmas.
As the COO, Abney gets a piece of the blame for the fiasco at UPS that caused the company to get crosswise with at least one U.S. Senator and to issue refunds to dissatisfied customers. Amazon.com Inc. (NASDAQ: AMZN) also refunded shipping costs and gave some customers $20 gift certificates as a result of UPS’s failure to deliver on time.
Maybe the confluence of bad weather and unexpectedly high demand in last year’s holiday season was a one-time event, but if UPS doesn’t have a plan for how to deal with such an event in the future, the consequences could be more severe. That will be Abney’s job, and it is not unreasonable to wonder if he is up to it.
UPS stock was up fractionally in early Friday morning, at $103.65 in a 52-week range of $84.20 to $105.37.
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