Is UPS Stock a Buy?
Macroeconomic headwinds are gathering, but the underlying quality of UPS (NYSE: UPS) earnings is improving. That's the key takeaway from the package delivery giant's recent third-quarter earnings report. So does it add up to make the stock a buy? Let's take a look.
A breakout of UPS' adjusted operating income by segment quickly gets to the point. As you can see below, international package segment income fell in the quarter as a low single-digit increase in revenue was more than offset by rising costs. During the earnings call, CFO Brian Newman conceded that average daily volume "did not improve as much as we anticipated due to continued macro[economic] softening." In fact, the international package average daily volume declined by 5.2% year over year in Q3.
The disappointing performance speaks to the uncertain economic environment in parts of the world. China's growth, for example, faces challenges due to the government's zero-COVID policies. Meanwhile, the European economy faces a tough winter due to soaring energy costs caused by sanctions applied on Russian energy.
Source Fool.com
