00:00This is a stock, as I've been saying this morning, one more of these stocks that severely underperformed the benchmark index over the last five years and year to date.
00:09Is cutting 34,000 jobs enough to turn that around?
00:14Well, I think it's part of the process, right?
00:16So UPS is on this journey, shall we say, of reshaping its network.
00:21And the reason why it needs to reshape its network is that, you know, it heavily relied on Amazon for volumes.
00:28And now they're kind of, as they would say, they're doing a glide path down of that volume.
00:33And that's just because it's really low margin business.
00:36And they're in the third quarter of a six quarter glide down.
00:40So we should see more volumes coming off.
00:42And what they're able to do now that they don't have this surge in low margin volumes is they're able to get rid of certain facilities, reduce headcount.
00:51And also those reductions are being driven by technology innovations that are helping the company be a lot more productive.
00:58You know, going into the quarter, I think investors and analysts were very cautious.
01:03You know, they didn't really know what to expect because of the impact of the de minimis exemption, which was removed for all countries, you know, a couple of weeks ago.
01:13And that obviously was going to have an impact on the business.
01:18But if you look at, you know, where management is guiding on the fourth quarter as it relates to revenue and margins, you know, it looks like the fourth quarter, at least for consensus is, at least this morning, there's about like 9% to 10% upside on the high end of that range that management provided this morning.
01:35So I think, you know, it looks like management is executing on its plan and we'll see, you know, what that will bring in 2026.
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