UPS’s main competitor, FedEx Corp. (NYSE: FDX), got a shot in the arm earlier this week, when activist investor Bill Ackman of Pershing Square Capital Management, indicated that he is raising a $1 billion fund to go after a large-cap, publicly traded company. FedEx was believed to be the target and shares have gained nearly 6% since then. UPS shares have risen about 3% on FedEx’s coattails.
UPS now expects second-quarter earnings per share (EPS) of $1.13, compared with a consensus estimate of $1.20. The freight carrier also set a full-year EPS target of $4.65 to $4.85, well below the consensus estimate of $4.98.
The shipping industry has been fighting overcapacity issues for at least two years now with little success. Too many ships or planes are a significant anchor dragging on profits. Coupled with customers looking for the cheapest possible method of shipment and a global economy that is barely breathing, UPS faces some significant hurdles.
Shares of UPS are down 5.7% in the first half-hour of trading this morning, at $86.24 in a 52-week range of $69.56 to $91.78.
Get Ready To Retire (Sponsored)
Start by taking a quick retirement quiz from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes, or less.
Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
Here’s how it works:
1. Answer SmartAsset advisor match quiz
2. Review your pre-screened matches at your leisure. Check out the advisors’ profiles.
3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future
Get started right here.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.