Package deal-delivery large UPS (UPS) reported robust fourth-quarter earnings early Tuesday, providing robust 2022 steerage and mountain climbing its quarterly dividend. UPS inventory jumped above key ranges, nearing a purchase level.
The corporate experiences after some transportation corporations struggled to draw employees in the course of the pandemic, and after the world’s backed-up provide chains raised issues about holiday-season deliveries and better prices.
UPS Earnings
Estimates: Wall Road anticipated UPS earnings to rise 17% to $3.10 per share, with income up 9% to $27.06 billion.
Outcomes: UPS earnings rose 35% to $3.59 a share. Income climbed 11.5% to $27.77 billion.
Outlook: UPS sees 2022 income of about $102 billion vs. views for simply shy of $100 billion.
In the meantime, UPS additionally hiked its quarterly dividend by 49% to $1.52 a share.
UPS Inventory
UPS inventory jumped 8.1% to 218.20 within the inventory market at the moment. Shares had been in a flat base with a 220.34 purchase level. UPS inventory is about to hole above its 200-day and 50-day traces.
Provide Chain Points
UPS experiences because the world’s delivery community stays clogged — a product of Covid restrictions and difficulties attracting labor that may be low-paying and tiring. With out there containers not all the time the place they wanted to be, and staff demanding higher compensation, the value to safe delivery area and get product shipped rose.
Companies that pulled again in 2020 in anticipation of a downturn had been caught off-guard by a wave of demand for items, a lot of which got here through on-line purchases. Issues concerning the provide chain’s capacity to maintain up with that demand stretched into the 2021 vacation season. Analysts anticipate the price of ocean freight to stay elevated this yr.
One analyst who follows UPS inventory, nevertheless, mentioned she believes UPS’ supply occasions might have held up final month.
“For probably the most half, the climate was OK throughout December, and customers involved about shortages and empty cabinets began their vacation procuring sooner than regular,” Cowen analyst Helane Becker mentioned in a analysis notice final week. “This seemingly helped on-time efficiency.”
UPS in November introduced a common quarterly dividend of $1.02 per share. When it reported third-quarter leads to October, UPS mentioned it anticipated robust client demand all through the fourth quarter, even because it handled larger prices and employees shortages. The corporate boosted its full-year adjusted working margin goal, and introduced a common U.S. price improve of 5.9% for 2022.
The corporate, in September, mentioned it deliberate to rent greater than 100,000 seasonal staff. Becker mentioned that primarily based on ads seen by the agency, Cowen believes wages for a few of these jobs ran larger than $20 an hour. That was larger than pre-pandemic hourly wages of $13, she mentioned.