NEW YORK (TheStreet) -- Shares of United Parcel Service (UPS) closed down 0.34% to $106.47 after CEO David Abney said that closer collaboration with major retailers should bring a smooth holiday season, but added that UPS would charge customers more or even refuse packages if last-minute sales by a major customer threaten the company's system, Reuters reports.
"With the changes we've made, I feel very comfortable about peak (season) this year," Abney told Reuters.
Abney said the company's brick-and-mortar and e-commerce retail customers are holding "Black Friday" sales earlier than normal this year and that UPS believes it is part of an effort by retailers to find ways to smooth out the pre-Christmas online ordering bulge, Reuters added.
"If we see going on into future years that there's going to be additional peak cost because of this last-minute surge, we would certainly look to address that through revenue management," Abney said.
Separately, TheStreet Ratings team rates UNITED PARCEL SERVICE INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate UNITED PARCEL SERVICE INC (UPS) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, good cash flow from operations, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- UPS's revenue growth has slightly outpaced the industry average of 5.6%. Since the same quarter one year prior, revenues slightly increased by 5.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- UNITED PARCEL SERVICE INC has improved earnings per share by 13.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, UNITED PARCEL SERVICE INC increased its bottom line by earning $4.62 versus $0.80 in the prior year. This year, the market expects an improvement in earnings ($4.96 versus $4.62).
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Air Freight & Logistics industry and the overall market, UNITED PARCEL SERVICE INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has increased to $2,359.00 million or 44.81% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 28.05%.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Air Freight & Logistics industry average. The net income increased by 10.7% when compared to the same quarter one year prior, going from $1,097.00 million to $1,214.00 million.
- You can view the full analysis from the report here: UPS Ratings Report