UPS Sinks After Spending Plan Crimps 2020 Profit Forecast - Yahoo
United Parcel Service Inc. fell as Chief Executive Officer David Abney said he would accelerate spending to speed deliveries and expand weekend service -- a strategy he sees as essential to the courier’s future even though it will squeeze profit this year.
In its push to capture more e-commerce business, UPS has grabbed more Amazon.com Inc. work after FedEx Corp. cut ties to the online retailer. But UPS’s investments in automation -- designed to cut costs in the long term -- are weighing on the 2020 outlook, which fell short of Wall Street’s expectations.
Parcel delivery companies are struggling to keep up with a flood of online shopping that requires faster deliveries seven days a week, as well as extended hours for retailers to ship packages. UPS is moving quicker to meet that demand, especially for small businesses. While those efforts will crank up costs and hurt profit in the short run, Abney said results will improve as soon as next year.
United Parcel Service Inc. fell as Chief Executive Officer David Abney said he would accelerate spending to speed deliveries and expand weekend service -- a strategy he sees as essential to the courier’s future even though it will squeeze profit this year.
In its push to capture more e-commerce business, UPS has grabbed more Amazon.com Inc. work after FedEx Corp. cut ties to the online retailer. But UPS’s investments in automation -- designed to cut costs in the long term -- are weighing on the 2020 outlook, which fell short of Wall Street’s expectations.
Parcel delivery companies are struggling to keep up with a flood of online shopping that requires faster deliveries seven days a week, as well as extended hours for retailers to ship packages. UPS is moving quicker to meet that demand, especially for small businesses. While those efforts will crank up costs and hurt profit in the short run, Abney said results will improve as soon as next year.
