Revenue missed by about 2% ($440Mn miss on $21.8Bn revenue). Revenue dropped 1.4% YoY, indicating that economically sensitive cyclicals are still having a hard time. FedEx too, expects just 1.8% growth for the second quarter. UPS’ earnings miss was 10% – that hurt the stock more, its down 10% premarket to $130.
For the past 3-4 weeks there has been a steady drum beat to get out of expensive tech to companies that could benefit from lower interest rates and cheaper valuations.
The 10% drop in UPS due to the big earnings miss and the lack of growth underscores how difficult it is to find and invest in the right cyclical. Avoid the value traps and be very discerning in finding the right company or index.