UPS Q2 Revenues and Earnings Top Estimates; Shares Drop 7%

Shares of United Parcel (UPS) fell 6.99% after the logistics company reported second-quarter financial results. Consolidated revenue rose 14.5% compared to the same quarter last year to $23.4 billion, slightly above consensus estimates of $23.24 billion.

Adjusted earnings came in at $3.06 a share, representing a 43.7% year-over-year increase and above analysts’ estimates of $2.81 a share. Additionally, the company delivered operating profits of $3.3 billion, up 47.3% from the same quarter last year. (See United Parcel stock charts on TipRanks)

During the quarter, United Parcel completed the divestment of UPS Freight, which resulted in the reduction of post-retirement liabilities by $2.1 billion. The company exited the quarter with $8.5 billion in cash from operations, with free cash flow of $6.8 billion.

“I want to thank all UPSers for executing our strategy and delivering high service levels, which fueled record financial results in the second quarter,” said CEO Carol Tomé.

For the full year, United Parcel is projecting a consolidated operating margin of about 12.7%, with about $4 billion of capital expenditure. Long-term debt repayments are expected to stand at $2.55 billion.

Consensus among analysts is a Moderate Buy based on 11 Buys, 7 Holds, and 1 Sell. The average United Parcel price target of $221.22 implies 13.34% upside potential to current levels.

UPS scores an 8 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.