UPS sinks despite profit, revenue beat

Yahoo Finance's Kristin Myers and Sibile Marcellus discuss why UPS shares sunk despite better than expected quarterly earnings.

Video Transcript

KRISTIN MYERS: UPS down right now over 8% after posting some beats in their earnings report. For more on this, we're joined by Yahoo Finance's Sibile Marcellus. Hey Sibile.

SIBILE MARCELLUS: That's right. So UPS actually beat expectations, yet we're seeing the stock being punished down about 8%. So let me first get into their quarterly results. So what UPS reported is that the company earned 2.28 a share from $21.2 billion in sales, surpassing Wall Street expectations. Revenue rose to $21.24 billion. They also beat profit expectations. The average daily volumes went up 13.8% because there's such robust residential demand.

Also, they saw growth in the quarter because of outbound demand from Asia and also small and medium-sized businesses that need all those goods shipped. Now, UPS plans to hire more than 100,000 workers this holiday season. Now why is the stock being punished? Why are we seeing it down more than 8% right now? Well, part of the reason might just be because investors are paying close attention to what might impact profit margins. And that specifically has to do with the company likely going to incur additional costs as it builds capacity to meet Americans and medium and small businesses' demand for more packages, more shipping, as we're seeing a lot of people are still, mostly, sheltering in place, especially those who don't want to further spread the coronavirus.