(CoinUnited.io) — Shares of United Parcel Service (UPS) experienced a decline today, in sympathy with the weak quarterly earnings report from rival company FedEx. As of Wednesday, UPS stock had dropped by 1.5%, after a previous fall of as much as 3.2% earlier in the session. FedEx, on the other hand, saw a significant drop of 10.7%.FedEx reported a 3% decline in revenue, amounting to $22.2 billion in the quarter. However, its margins did expand. The company attributed the decrease in revenue to weak demand from retailers cutting back on inventory, an uncertain macroeconomic environment, and lower demand for FedEx Express from the U.S.Although UPS and FedEx are affected by similar macroeconomic trends, there are fundamental differences between the two businesses. FedEx heavily relies on overnight delivery through its Express segment and has a greater exposure to international markets. Alternatively, UPS primarily focuses on domestic ground delivery.During its earnings call, FedEx management acknowledged the continuous weakness in industrial production globally. They also noted that the inventory de-stocking phase has completed, but retailers are still maintaining lean inventory levels.UPS experienced an even steeper decline in revenue during the most recent quarter due to challenging macro conditions and interruptions from labor negotiations. Therefore, it is not surprising to see UPS stock modestly declining in response to the FedEx earnings update.Although the Federal Reserve is expected to reduce interest rates next year, indicating a possible turnaround in the domestic economy, it may take time for these changes to materialize for package delivery companies like UPS.
