After the United Parcel Service (UPS) released its second quarter earnings on Friday its stock took a dip. But TheStreet's Jim Cramer said it wasn't nearly as bad as we thought.
The delivery company's 5.6% increase in revenue, largely attributed to Next Day Air, was fueled by Amazon's (AMZN) packages, Cramer said.
Cramer said the company's year-over-year jump in revenue from its Next Day Air shipments was fueled by Amazon packages, as consumers have continued to buy, especially in e-commerce. The company reported quarterly earnings of $1.43 a share, in-line with Wall Street's estimates. Profit jumped 3.2%, pointing to improvements in e-commerce, and the company predicts it will grow faster than expected through the year.
"I thought it was really interesting that 5% growth in next day, that's Amazon," Cramer said.
Revenue slimbed 3.8% year-over-year to $14.63 billion, beating estimates of $14.62 billion.
But the company may not benefit from Amazon's efforts for long, as the company recently entered into an agreement with the British government to test its drone delivery methods.
Amazon has been working on drone delivery systems for quite some time. The packages can only weight up to 5 pounds if all goes as planned, and it will take 30 minutes for delivery. UPS could be in the clear for larger packages, but the advancement could pose a threat to its monopoly on deliveries.
The Wall Street Journal reported that Chief Executive David Abney said of the threat of Amazon that UPS' will always have more deliveries, lower prices and reliability because of its large customer base.