The United Parcel Service (UPS) hosted its Investor Day Conference on Tuesday, as the company aims to return to growth and boost its profitability. UPS CFO Brian Newman joins Yahoo Finance to discuss the company’s financial projections.
Newman expresses confidence in the postal courier’s “great plans” for the future, mentioning the company has set a 5% revenue growth target for its top line. Additionally, he highlights the potential for “inorganic M&A opportunities” to help UPS reach its projected $114 billion in revenue. Newman emphasized that UPS has “proven” itself to be “agile on cost,” which will aid in achieving the projected 13% margin.
Regarding the M&A opportunities, Newman clarifies that these are not focused on a single, large deal but rather “a series of deals” targeting the healthcare and international sectors.
Newman highlights that the labor deal reached by UPS, which will mark its first anniversary in August, will allow the company to reduce internal costs, thereby propelling margin growth. He states that 46% of the contracts’ value materialized in the first year, so the “good news” is that this will drop labor inflation and “drive cash.”
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Editor’s note: This article was written by Angel Smith