Every few days during a typical earnings season, we receive results from a company that, simply because of the economic nature and geographic spread of its business, warrants the label "bellwether."
Giant international equipment maker Caterpillar
Yesterday, it was United Parcel Service's
Net income was $970 million for the quarter, down nearly 10% from the $1.08 billion for last year's third quarter. On the EPS line, the company generated $0.96, seven cents above expectations. Both the U.S. Domestic Package business and its International Package counterpart managed to increase revenues, but saw skinnier margins cut into operating profits. The "grower" was Supply Chain and Freight, which managed an expansion of its revenue, operating profit, and margins.
Looking ahead, and like so many large companies of late -- Microsoft
Largely on that basis, management is taking steps to help it "manage through these tough business conditions." Those steps will include a $200 million reduction in capital spending, along with layoffs where necessary.
For my money, UPS is a name that deserves Foolish consideration unless one is inclined to avoid the market entirely for a spell. The company stands to benefit over time from its global business spread and the quality of its leadership. Declining energy prices also won't hurt.
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United Parcel Service is a Motley Fool Income Investor recommendation, while FedEx is a Stock Advisor pick. Microsoft is a Motley Fool Inside Value pick. Try any of our Foolish newsletters today, free for 30 days.