Fedex & UPS Scramble Amid Media Fire
With the shortened holiday shopping season this year, many traders and investors were looking to the online shopping outlets to perform well. As a consequence of online shopping growth, the package delivery companies have experienced great demand pressure during the holiday season. Who do you think gets your package from Amazon to your home in just two days?
Well, for the most part Fedex (NYSE:FDX) and UPS (NYSE:UPS) control the speedy package delivery market. It looked like it would be a great fourth quarter for both companies. A time pressed consumer and all time high expected online shopping sales pointed to strong revenues for both companies. However, late this week reports of package delays and transit issues started to weigh on both names.
UPS and FedEx came under media fire for failing to deliver packages in time for the holiday. Both companies quickly blamed the delays on weeks of bad weather and higher demand from soaring online sales.
It was reported that UPS didn’t make pickups or deliveries on Christmas Day, but it brought in extra workers on Christmas night to the company’s hub in Louisville, Ky., to sort packages for Thursday and Friday deliveries, a spokesperson for the company told The Associated Press. Some FedEx customers were able to pick up packages at local FedEx Express centers on Christmas Day.
As we make our way into the fourth quarter’s earnings season, all eyes will be on top line revenues. Hopefully, these delays didn’t cost the companies too much in terms of guaranteed delivery refunds. Heading into next week we should see some analyst commentary surrounding the matter. Shares of both companies were largely unchanged on Friday’s session. Analyst revenue adjustments could send shares lower next week if the declines are significant.
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