Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of B . The company's strongest point has been its expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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Highlights from the ratings report include:
- UNITED PARCEL SERVICE INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, UNITED PARCEL SERVICE INC increased its bottom line by earning $3.83 versus $3.47 in the prior year. This year, the market expects an improvement in earnings ($4.59 versus $3.83).
- UPS, with its decline in revenue, slightly underperformed the industry average of 4.6%. Since the same quarter one year prior, revenues slightly dropped by 0.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- The gross profit margin for UNITED PARCEL SERVICE INC is currently extremely low, coming in at 5.90%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 3.60% trails that of the industry average.
- Net operating cash flow has decreased to $1,238.00 million or 39.55% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
United Parcel Service, Inc., a package delivery company, provides transportation, logistics, and financial services in the United States and internationally. It operates in three segments: U.S. Domestic Package, International Package, and Supply Chain & Freight. The U.S. United Parcel Service Inc (UPS) Class B has a market cap of $53.04 billion and is part of the services sector and transportation industry. The company has a P/E ratio of 18.3, above the S&P 500 P/E ratio of 17.7. Shares are down 0.2% year to date as of the close of trading on Tuesday.
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--Written by a member of TheStreet Ratings Staff.
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