UPS revenue surges but shares drop sharply

Shares of UPS plunged in early trading Tuesday, on pace for their worst day in 9 months. The package delivery company’s quarterly revenue jumped almost 15%.

But what disappointed investors was growth at its core unit. Revenue at its U.S. segment rose 10.2%, falling short of Wall Street’s targets. UPS had benefited during the health crisis as it frantically delivered everything from food to masks to vaccines, but analysts said investors took the U.S. revenue result as a sign that that growth is slowing.

In the latest quarter, e-commerce deliveries, air shipments and specialized handling of healthcare products like vaccines helped drive the top and bottom lines past analysts’ estimates. Deliveries of healthcare goods are among the most profitable for the company.

UPS said it’s keeping a close eye on inflationary pressures and the COVID-19 Delta variant.

Its shares fell as much as 9% in early trading Tuesday. Shares of rival FedEx, which last week said labor shortages are weighing on its outlook, fell as well.

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